MEGA - Moldova Economic Growth Analysis № 19 / 2018
MEGA - Moldova Economic Growth Analysis № 19 / 2018

Author(s): Alexandru Fală, Dumitru Pîntea, Eugen Ghiletchi, Vadim Gumene, Valeriu Prohniţchi
Subject(s): National Economy, Economic policy
Published by: EXPERT-GRUP Centrul Analitic Independent
Summary/Abstract: As a reflection of the current account dynamics, the domestic demand components developed robustly in the first half of 2018. The main component of the demand - households’ consumption - increased by about 4.2%, financed by higher incomes from almost all sources. In particular, the income from the salaries increased by about 3.8% in real terms. The higher salary income is explained to a certain extent by the increase in men employment (+2.6% of the employed population) and, especially, women’s employment (9.2%), as well as by the recession of the unemployment rate to historical lows (3.0% for women and 3.9% for men, both seasonally adjusted). But the level of employment continued to increase especially through the informal employment in agriculture. Generally, the agricultural employment has grown steadily over the recent 5 years, which is a phenomenon with dual economic implications. The involution of remittances expressed in Moldovan lei is equally notable and worrying, which decreased by about 3% in real terms of the domestic currency. Revenues from social protection programs increased by 10%. This administrative increase in revenue - both welcome and necessary - is something to be expected in the current political context making the Government to offer more generous electoral alms. In the long run, however, it makes households more vulnerable to potential problems affecting the revenue side of the public budget.

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