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Woldemar Walter

Current economic situation: investment-driven growth

Economic growth is expected to reach 4.2% in 2019, thus surpassing earlier forecasts. The main reason for high growth is the strong increase of investment by over 20% in the first half of 2019. This development is reflected by an expansion in the construction sector,
which grew by ca. 27%.

  • Moldova
NL 55 | September – October 2019
Macroeconomic Analyses and Forecasting

Other indicators are developing as expected. In 2019, inflation will reach 5% – after only 3% in the previous year – and thus be in the range of the National Bank’s target corridor. The exchange rate and currency reserves are stable, while remittances are declining
due to low growth in Russia and the EU; this weakens private consumption.
There are little changes in foreign trade, with exports and imports both growing by only 2% during the first eight months of 2019.
The budget deficit will probably amount to less than 3% of GDP and remains manageable.
Overall, the economy is growing at the previous year’s pace. This trend is expected to continue also in 2020, with economic growth at around 3.8%. The future development depends on how successful the government will implement key reforms. A recent study of the German Economic Team outlines reform proposals that would support this process.

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