Economic event of 2021: Moldova’s economy recovered after recession

The swift economic recovery this year after the recession of 2020 can be classed as the most important positive event of the economic year 2021. “During the first nine months, a growth of over 10% was recorded and the growth for the whole year is expected to be of 8-10%. We see the reanimation of investments, primarily of the private ones,” said Stas Madan, economic expert of the Independent Think Tank “Expert Grup”, who commented on the economic situation this year at the request of IPN. The rise in amounts collected as taxes and strengthening of the budget are among other important elements mentioned by Stas Madan. “The amounts collected into the national public budget were appropriate this year and enabled to finance important costs”.

The expert said the ‘major’ budget deficit that tends to become a norm in Moldova too is one of the less satisfactory elements. “Even if we realize that the exceptional situations require exceptional measures, this situation should be followed attentively in the next period, including as regards the servicing of the public debt. For next year, we have a rather large budget deficit, of over 15 billion lei,” stated Stat Madan.

The non-starting of important reforms in 2021, such as the territorial-administrative reform, is another less positive element. “Next year will be critical for the implementation of reforms as a new electoral cycle will begin in the second half of the year and the probability of doing reforms will be much lower. That’s why it is important for these processes to be maximally encouraged in the immediate period so that they can be carried out,” explained Stas Madan.

Even if Moldova’s economy in 2021 primarily recovered after the recession, also owing to the fact that Moldovan agriculture achieved very good results, the government didn’t manage to remedy the social situation in the country. PAS’ decline in polls is due to the social problems experienced in the Republic of Moldova. “Given the promises made by PAS and the big expectations of the citizens, things didn’t develop as the people wanted,” said Veaceslav Berbeca, expert of the Institute for Development and Social Initiatives IDIS “Viitorul”.

“We understand that things cannot be changed overnight and problems that last for years cannot be solved. For good results to be achieved, time, human resources and financial resources are needed. But the people in the Republic of Moldova no longer want to wait as they have waited for 30 years and we are still there, in abject poverty. The worsening of the living conditions (against economic growth, e.n.), determined by the rise in gas rates and food prices, and the drop of purchasing power of the people are among the reasons why PAS fell in polls towards the end of 2021,” explained Veaceslav Berbeca.

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