December 23 (SeeNews) - Moldova's parliament adopted on a second a final reading the 2023 budget bill targeting economic growth of 2% and a deficit equivalent to around 6% of the gross domestic product (GDP).
The budget bill was passed with the votes of 57 members of the 101-seat assembly, the parliament said in a press release on Thursday.
Budget deficit is projected at 18.3 billion lei ($937 million/892 million euro), of which approximately 12.8 billion lei will be covered from external sources, while the remainder will be provided for by domestic sources, according to the bill posted on the finance ministry's website.
Budget revenues are expected to come in at 64.9 billion lei, up 9.3% year-on-year, while expenditures are planned at 83.2 billion lei, up 12.5% compared to 2022.
Value added tax will be the most important source of revenue, providing more than half of the entire volume, while income from grants is projected at 5.5 billion lei, representing 8.5% of total revenue.
The main expenses found in the draft budget for 2023 are compensations for the payment of energy bills in the amount of some 5 billion lei, a monthly increase in the wages in the public sector, and compensatory payments to people whose monthly salary will be less than 4,000 lei.
The 2023 draft budget is built on forecasts for a 15.4% annual inflation. Moldova's consumer prices rose by 31.41% year-on-year in November, compared to an increase of 34.62% in the previous month, according to the latest data from the National Bureau of Statistics.
Moldova's economy contracted by an annual 0.6% in real adjusted terms in the second quarter of 2022 due to poor performance of the construction, manufacturing and real estate sectors, the statistical office said in September.
In October, the International Monetary Fund (IMF) said that Moldova's economy will grow by 2.3% in 2023. However, the IMF said it expects Moldova's GDP to stagnate in 2022, revising its April forecast for 2% growth.
In August, Moldova's government revised its 2022 economic forecast to zero from 0.3% to reflect the economic spill-over effects from the war in Ukraine and the steep rise in energy prices.
In 2021, the country's economy grew by 13.9% in real terms, following a 8.3% contraction in the previous year.
(1 euro= 20.4941 lei)