Moldova has a relatively low level of public debt in relation to GDP, compared to other countries, and this allows the state to take out new loans to restore the real economy - NBM.
This was stated by the President of the National Bank of Moldova, Octavian Armasu, answering questions from journalists at the Economic Press Club after the presentation of the fourth Inflation Review this year at the NBM. Answering the question of how the expansionary fiscal policy advocated by the NBM can be combined with such a level of budget deficit as it is now in Moldova, the head of the National Bank noted that the greater the budget deficit, the faster the state accumulates debts, and this is an axiom. “But, on the other hand, our level of public debt is still at a relatively low level - less than 40% of GDP, which allows the state to borrow more easily. And now is the moment to support economic recovery. Therefore, the budget deficit will not now be a problem for Moldova, for the Ministry of Finance. Compared to other countries, we have a fairly low level of public debt in relation to GDP - less than 40%, and not many countries have such a comfortable situation. We can take out quite a lot of loans to restore the real economy, as well as invest in development, in investment projects,” told Octavian Armasu. At the same time, according to him, at this stage it is important to take measures to stimulate consumption. “We now have weak domestic demand, and the main sources of financing it are wages, pensions, benefits, remittances and lending. Herewith, the state mainly pays salaries, pensions, benefits, and there is room for this component to support domestic demand. It cannot be said that it is bad to maintain consumption at the current stage. When we reach another phase of the economic cycle, when consumption recovers, then it will be possible to direct financing only to investment projects,” said the NBM President.// 14.11.2023 — InfoMarket.
