In 2021, Moldova's GDP growth may exceed 5%, but due to uncertainties, the quality and sustainability of this growth will be low, - Expert-Grup.
This forecast was presented by economists of the Independent Analytical Center in the XXth edition of the MEGA study. According to experts' calculations, economic growth of 5.4% is possible in 2021, taking into account a favorable agricultural year, recovery of domestic and external demand, as well as a lower comparative base. Experts believe that the main growth factor in 2021 will be the agricultural sector (the expected growth in value added in this sector is 14.5%), which will lead to an increase in exports (+ 9.6%) and an increase in the final consumption of agri-food products (+ 8.3%). Economic recovery in the region is also expected, which will also stimulate the growth of exports and imports (+ 7%, while export growth rates are expected to be higher). At the same time, this growth will occur against the background of a decrease in investment activity from both the private (-7-8%) and public (-10-18%) sectors, which indicates the low quality of growth and the instability of economic forecasts for 2021. This year, experts predict lower growth rates of wages (+ 1.7% against + 4% in 2020) and inflation (2.6% against 4% in 2020). Herewith, the forecast is based on the hypothesis of easing the pandemic crisis and the gradual lifting of restrictions on movement and growth of economic activity. If a new wave of a pandemic follows, GDP growth will be lower (2-3%), while the decline in exports, investments and consumption will continue. However, against the backdrop of the already existing liquidity crisis, a new wave of Sars-Cov-2 could provoke chain bankruptcies of companies, layoffs in workers and an increase in unemployment, causing a snowball effect. The uncertain political situation remains another risk factor. Even if early parliamentary elections are held, much of 2021 will pass without a stable government capable of responding to the crisis and supporting the economic recovery. Another serious risk is the financing of the budget deficit, which may amount to about 6.8% of GDP under the baseline scenario of the situation. If uncertainty, including political uncertainty, persists, economic volatility will continue in the coming years. Economic development will be slow, inertial, without creating decent jobs and increasing the country's competitiveness. In this context, experts note the need to promote a policy of supporting investment in the technology of enterprises and encouraging them to use local raw materials for processing and export. Experts believe that the government urgently needs to implement a set of measures to support business and the population, which will also contribute to the recovery of the economy of Moldova in 2021-2022. // 16.02.2021 — InfoMarket.
