MEGA - Moldova Economic Growth Analysis № 22 / 2021
MEGA - Moldova Economic Growth Analysis № 22 / 2021

Author(s): Adrian Lupușor, Alexandru Fală, Dumitru Pîntea, Stas Madan, Tatiana Savva, Vadim Gumene
Subject(s): National Economy, Economic policy
Published by: EXPERT-GRUP Centrul Analitic Independent
Summary/Abstract: The year 2020 was marked by the overlap of two major crises (the Covid-19 pandemic and the drought), causing the most severe recession in the last 20 years. Gross Domestic Product (GDP) estimated for 2020 shrunk by about 6.5%, because of the repercussions of the coronacrisis and drought that undermined the agricultural production. The restrictions imposed during the pandemic caused a sharp decline in sales, which determined companies to stop/postpone investments and cut on staff costs (reducing working hours and wages, technical unemployment and, to a lesser extent, personnel layoffs). This led to the contraction of consumption, which caused the boomerang effect on the private sector by lowering demand, and affected the national public budget through the under execution of revenues, especially from indirect taxes. Micro and small enterprises, in particular those that failed to diversify their markets and access foreign markets, were most affected. The most affected employees were those with low salaries, informally employed, mainly women, as well as the elderly and young people.

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