Aggravation of the geopolitical situation in the world, recession in partner countries and social tensions in the US and the EU create risks for Moldova's economic development in the mid-term perspective
This is stated in the Medium Term Budgetary Forecast (2025-2027), which was approved by the Moldovan government. The document says that the risks that may affect the situation in Moldova were also taken into account when developing the baseline scenario of macro-financial prospects for the near term. "As in the previous year, the risks continue to be very high, especially those coming from the external environment, with economic, political and social consequences, the most important of which are the following," the document says. For instance, heightened geopolitical tensions around the world with direct impact on the global economic environment could affect energy and other product prices, supply chains, external demand, etc. "Uncertainties and risks remain high due to the persistence of the current geopolitical context regarding Russian aggression against Ukraine. The conflict in Ukraine affects the country's security, putting additional pressure on the government and population in the face of uncertainty regarding the price of energy and certain raw materials. Dependence on electricity purchases from Moldavskaya GRES represents another vulnerability due to the risk of interruption of natural gas supplies from Gazprom or transit of Russian natural gas through Ukraine. In both situations, Modavskaya GRES would have difficulty generating electricity. Under these conditions, electricity will be purchased from European markets with associated availability risks and prices," the document says. At the same time, recession and negative shocks in the development of the economies of Moldova's main trading partners may negatively affect exports, remittances, industrial activity, etc. Moldova's main trading partners continue to face constant threats from Russia, which uses hybrid tactics to influence the politics and security of these states. The change in geopolitical development will lead to a significant reduction in exports and remittances, which will have a significant impact on economic growth. Among the external factors, the Ministry of Finance also mentions growing social tensions in the US and EU countries - this increases uncertainties about the prospects of global economic development. // 09.08.2024 – InfoMarket
