January 11 (SeeNews) - Moldova's economy is expected to grow by 1.6% in 2023, the World Bank said, decreasing its previous June forecast by 1.1 percentage points (pp).
The World Bank sees Moldova's economy growing by 4.2% in 2024, the same rate predicted in June, it said in its January 2023 Global Economic Prospects report published on Tuesday.
Moldova's gross domestic product (GDP) is estimated to have contracted by 1.5% last year, compared to a 0.4% decrease forecast in June.
The economy of the Eastern Europe sub-region, which includes Moldova, Belarus and Ukraine, is expected to contract by 1.7% in 2023, as surging inflation, higher borrowing costs, lower remittances in Moldova, and additional sanctions for Belarus are expected to continue to depress domestic demand, according to the report. For 2022, a strong contraction of 24.2% is expected in the region, to the war in Ukraine.
"The forecast is subject to significant downside risks, relating particularly to energy supplies. Unfavorable weather conditions could also reduce agricultural yields in the subregion, further exacerbating inflationary pressures and food insecurity," the World Bank said.
The global lender forecast GDP growth of 2.6% for Moldova in 2023 in the autumn edition of its Europe and Central Asia (ECA) Economic Update published in October 2022.
(1 euro=20.5563 lei)