MEGA - Moldova Economic Growth Analysis № 20 / 2019
MEGA - Moldova Economic Growth Analysis № 20 / 2019

Author(s): Alexandru Fală, Dumitru Pîntea, Iurie Morcotîlo, Vadim Gumene, Valeriu Prohniţchi
Subject(s): National Economy, Economic policy
Published by: EXPERT-GRUP Centrul Analitic Independent
Summary/Abstract: In the last quarter of 2018 and all through the first half of the current year, the economy grew amidst a slight intensification of inflation anticipations and pressure on the Moldovan Leu exchange rates. Seasonally-adjusted Gross Domestic Product increased by 4.1% in Q1:19. The growth of demand was largely driven by the spectacular rise in the salaries in the real sector, public investment programs, and also by a slight improvement in employment. In fact, gross fixed capital formation was the main driver of GDP growth (2.3 percentage points), while household consumption contributed 1.6 points. There are, though, concerns regarding the sustainability and quality of these economic engines. In particular, there is evidence that despite the tax reform, the employment increased due to more people getting informal jobs while the number of formal wage earners dropped. It is also clear that the public capital expenditure program will be rationalized by the new Government and will no longer serve as an important source of growth in the short and medium terms.

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