Finances

WORLD BANK FORECASTS MOLDOVA'S BUDGET DEFICIT IN 2024 TO BE WITHIN 4.1% OF GDP, AND IN 2026 - 3.1%.

16 may, 2024

Moldova's imports will exceed exports in the coming years, World Bank (WB) experts predict. In a report on Moldova's economic prospects, the bank forecasts an improvement in the income balance, which will be positively affected by the gradual recovery of remittances.

"We forecast an increase in exports, supported by services and food exports, especially in the first half of 2024 due to a good harvest last year. Following the dynamics of domestic demand and lower re-exports from Ukraine, we expect imports to increase more than exports, leading to a slight worsening of the trade deficit," the report said.

According to the WB's forecasts, remittances will stabilize after a sharp drop in inflows from CIS countries following Russia's invasion of Ukraine.

"Foreign exchange reserves will remain at an adequate level and cover future imports for more than four months until 2026.A high fiscal deficit of 4.1% of GDP is expected in 2024 as a result of spending pressures that include population support, job creation support, refugees and infrastructure investment," the bank notes.

The bank's experts believe that in the medium term, the fiscal deficit will narrow to 3% of GDP in 2026 as fiscal support is phased out.

"While expenditures and revenues as a share of GDP will approach historical averages, fiscal consolidation will be supported by measures to improve domestic revenue mobilization. Grants will decline, but tax revenue collection is expected to be positive," the WB forecasts.

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