Economic situation at the end of the year
Economic growth will amount to a good 4% in 2018. A slight slowdown is expected for 2019; GDP is forecasted to grow by 3.8%. Growth is driven by consumption and investment. On the supply side, manufacturing, construction and retail trade are contributing to growth; agriculture stagnates
Inflation will fall to around 3.6% in 2018 due to external factors. Thus, prices are largely stable. The Moldovan Leu remains strong; this leads to growth of imports, which will rise by around 21% in 2018. Exports are also rising at a double-digit rate of around 16%. Trade integration with the EU continues; about 69% of exports are going to the EU market. The fiscal deficit in 2018 is expected to be only 1.9% of GDP despite the upcoming parliamentary elections. For 2019 a deficit of 2.8% of GDP is expected, thus, it will
remain manageable.
Overall, economic growth will remain at roughly the same level as in previous years. Reforms are needed for a higher growth – especially in the judiciary and the education system. The banking sector and the tax administration show how such reforms can work. The international community should provide the necessary support after the parliamentary elections on 24 February in order for that to be achieved. At the
same time, clear conditions must be a prerequisite for this support.
