The Ministry of Economy has worsened its macroeconomic forecasts for 2020: the decline in GDP will be 6.5%, not 4.5%, as previously predicted.
The Ministry of Economy and Infrastructure presented a new forecast of macroeconomic indicators for 2021-2023, taking into account the Covid-19 pandemic and its impact on all sectors of the economy. This is the third change in the forecast of macroeconomic indicators this year: in March, was expected an annual GDP growth of 3.8%, but in the summer the parameter was revised: a decline of 4.5% was already predicted. The updated forecast of the Ministry of Economy envisages that in 2020 the economic decline will be 6.5% - to 201.4 billion lei. At the same time, in 2021-2023 GDP growth is projected at 4.7%, 4% and, accordingly, 4.2%. By 2023, Moldova's GDP in nominal terms will amount to 264.5 billion lei. Herewith, the updated forecast takes into account external factors: a decrease in world production, an increase in unemployment, a decrease in consumption and, as a result, a change in forecasts for global economic growth downward by 4.4% in 2020, but with a subsequent recovery in growth - by 5.2% in 2021. In the coming years, the global economy is expected to grow at 3.5%, but the recovery is likely to be long, inconsistent and with a high degree of uncertainty. According to the IMF forecasts, in 2020, for the first time in all regions of the world, a recession is expected, with the exception of China, where GDP growth is predicted by 1.9% (in 2021 - 8.2%). Thus, in the EU, which is Moldova's main export partner, GDP is expected to decline by 8.3%, although an increase of 5.2% is forecasted for 2021. A more serious decline in oil prices is expected this year - by 32.1%, which will affect another important foreign economic partner of Moldova - Russia, where the economy is forecasted to decline by 4.1% this year, but a slight recovery is expected in 2021 ( + 2.8%). This year the crisis in world trade is expected to deepen due to weak demand for goods and services, including travel services. The main uncertainty is the COVID-19 pandemic and how the world's countries will tackle it. A new wave of the pandemic will lead to a decrease in external demand and a decrease in exports, remittances, industrial production and consumption, while unemployment will increase. Forecasts may worsen in the event of price fluctuations in the oil product market, geopolitical changes, an intensification of the pandemic in 2021. Meanwhile, internal risks remain: the second wave of the pandemic and possible new restrictions similar to the state of emergency in March-May; decrease in consumption and decrease in household income; adverse weather conditions; political instability; the disproportionality of macroeconomic factors (growth in the budget deficit, labor costs, etc.); currency fluctuations, etc.// 27.11.2020 — InfoMarket.
