The EBRD has improved the 2023 GDP forecast for Moldova and projects zero economic growth this year instead of the previously expected 1.3% decline.
At the same time, the European Bank for Reconstruction and Development (EBRD) has maintained the economic growth forecast for Moldova for the next year and expects Moldova's GDP to grow by 3.5% in 2024. Such data are given in the new, September Regional Economic Prospects published by the bank. In the previous May review, the EBRD maintained the forecast for Moldova for the current and next year, stating that it expects in 2023 a decline in its GDP by 1.3%, and in 2024 – a 3.5%growth. Experts from the European Bank for Reconstruction and Development said in the new September Regional Economic Prospects that the Moldovan economy continued to struggle in the first half of 2023 after a sharp drop in economic activity in 2022. In the first quarter of 2023, Moldova's GDP fell by 2.4% year-on-year, mainly due to a continued decline in private consumption. Industrial production in the first half of 2023 declined by 7.6% y-o-y, while agricultural production fell by 1%. According to the EBRD, on the other hand, annual inflation fell sharply to 9.7% in August 2023 amid stabilization of global energy prices, which allowed the National Bank of Moldova to make a series of interest rate cuts from 21.5% in November 2022 to 6% in June 2023. Significant external financing of the official sector in 2023 supported the national currency, increased foreign exchange reserves and eased pressure on the overstretched state budget. The government raised public sector wages and pensions and expanded social support for the most vulnerable. Along with falling inflation, this led to real income growth turning positive in Q2 2023, paving the way for economic recovery in the second half of 2023. "Thus, Moldova's GDP is expected to remain flat in 2023 and grow by 3.5% in 2024, supported by policy reforms in the context of EU accession and continued strong external financing," the EBRD experts said. As previously reported by InfoMarket, Moldova's GDP in 2022 amounted to 272.6 billion lei and decreased in real terms, compared to 2021 by 5.9%. Moldova's GDP in the first half of 2023 amounted to 133.91 billion lei, decreasing by 2.3% compared to the same period of 2022. At the same time, according to preliminary data, the gross domestic product in the second quarter of 2023 amounted to 70.2 billion lei in current market prices, decreasing in real terms by 2.2% compared to the second quarter of 2022. // 27.09.2023 - InfoMarket.
