The IMF predicts Moldova's GDP growth in 2023 by 2%, in 2024 - by 4.3%, and in 2025 - by 5%.
This is stated in the materials of the International Monetary Fund, published after the IMF Executive Board completed the third assessment of the implementation of the ECF / EFF Program and provided Moldova with access to a new tranche in the amount of approximately $96 million. As noted, IMF experts predict a moderate recovery of the Moldovan economy this year after last year's decline in GDP by 5.9%. As noted, Moldova's real GDP growth is now projected at 2% in 2023, compared with a 1.5% growth forecast in the second review, which reflects a number of factors that partially offset the negative carry-over from 2022. IMF experts point out that the slowdown in domestic consumption should ease, with inflation expected to fall faster than previously thought, and monetary easing to support lending. Higher wages and pensions should support consumption. Agricultural output should recover in 2023. In addition, a faster recovery of trading partners should stimulate foreign trade. The fund's experts note that a relatively looser overall set of policies and lower-than-expected global energy prices should also support demand. Steady medium-term growth is projected, driven by a recovery in domestic consumption and investment as the effects of the war ease, reforms take place and Moldova's candidacy for EU membership advances. However, the negative output gap will persist over the medium term and is estimated to be significant, with real GDP in 2026 expected to be about 14% below pre-war projections. Inflation is projected to slow rapidly in 2023 due to the effect of a high base in 2022, slowdown in global commodity prices and a more gradual recovery in consumption falling within the target range of the National Bank in early 2024. IMF experts predict that the average consumer price index in 2023 will be 13.9%, and in 2024 and 2025 - 5% each. Inflation is expected to reach 8% at the end of 2023, and 5% each in the next 2 years. The current account deficit is expected to hit 12% of GDP this year before narrowing to its pre-pandemic average of around 8% of GDP over the medium term, supported by expected export growth as Moldova continues to refocus and increase its trade with the EU and the rest of the world, and reduces energy and food import costs. The IMF projects the fiscal deficit to widen to 6% of GDP in 2023 with full budget execution and policies to mitigate the effects of erosion of purchasing power, reduce energy poverty, ensure energy security, and support recovery. Public debt is projected to peak at 37.1% of GDP in 2025 but remain stable. The overall risk of a debt crisis is assessed as moderate. External debt remains at low risk of crisis, with a large share of debt held by concessional multi-/bilateral creditors. // 28.04.2023 — InfoMarket
