May 13 (SeeNews) - Moldova's economic output is expected to decrease by 4% this year and then recover to 5% growth in 2021, the European Bank for Reconstruction and Development (EBRD) said on Wednesday.
The coronavirus crisis will likely have a significant negative impact on Moldova's already decelerating economy, the EBRD said in the May 2020 edition of its Regional Economic Prospects report.
In the previous issue of the report released in November 2019, before the coronavirus outbreak, the EBRD had said it expected Moldova's economy to grow by 4% this year.
Now, weaker demand from trade partners resulting from the coronavirus crisis will dent Moldovan exports, especially from the free trade zone which is well integrated into the global supply chains.
Weaker finances will be exacerbated by a likely drop in remittances, which will weigh on disposable incomes, while increased uncertainty, compounded by the volatility in the financial markets, will likely lead to postponed private sector investment projects, the EBRD said.
According to the bank, economic growth in Moldova decelerated to 3.6% in 2019 due to a near-standstill in the last quarter of the year. Strong investments benefiting from heightened construction activity, private consumption and robust export growth all contributed to economic expansion.
($=0.8991 euro)