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German Economic Team Moldova.

The “Economic Monitor Moldova” by the German Economic Team Moldova provides an overview over the most important economic indicators and also offers an assessment of current topics by GET Moldova.

Overview:

• Consumption and agriculture support unexpectedly high GDP increase of 4.1% in 2016;
• GDP expected to increase by 4.5% in 2017, partly due to higher public investment;
• National Bank to reach inflation target of 5% +/-1.5 percentage points in 2017;
• Stable exchange rate reflects regained macroeconomic stability;
• Remittances on the rise, except for those originating from Russia;
• External trade increases significantly in 2017 in the context of economic recovery;
• Very low budget deficit of 1.8% of GDP in 2016, due to lack of financing;
• Public investment increases significantly in the context of the IMF programme; this causes a justifiable increase of the budget deficit to 3.7% of GDP.

Topics:

• Cluster development. The creation of clusters can contribute to industrial development and FDI attraction;
• External trade. Extension of trade with CIS is desirable, but should not happen at the expense of trade with the EU; criticism of the DCFTA is unfounded;
• Banking sector. Recommendations how to absorb excess liquidity in the banking sector.