The World Bank Predicts Moldova's Economy to Grow by 3.8%

The economy of Moldova in 2019 will grow by 3.8% - these are the results of analysis by experts from the World Bank (WB). Despite a rather positive outlook, in Eastern Europe, the World Bank expects a fall in economic growth rates. The growth forecast for the global economy is also slightly reduced. “At the beginning of 2018, the world economy went into overdrive, but during the year it slowed down, and the situation could become even more difficult next year”, said World Bank’s chief executive officer Kristalina Georgieva, adding that “as economic and financial difficulties increase in developing countries, current advances in reducing global poverty may be brought into a question”. World Bank experts link the decline in economic growth in Eastern Europe and the Balkans with the economic activity of Turkey, which will be weak this year. "The growth rate of the Turkish economy will slow to 1.6% due to high inflation, high interest rates and a low level of confidence that adversely affect consumption and investment," the WB report says. Experts also note that the growth rate of the economy in the western part of the region is projected to decline due to a slowdown in economic activity in the countries of Central Europe. Poland’s economic growth is expected to slow to 4% amid slowing economic growth in the euro area. In the eastern part of the region, economic growth is expected to slow down due to a slowdown in the growth of the Russian economy to 1.5%. “The risks of worsening the situation seem more significant. The most important is the possibility of escalating financial turmoil in Turkey and massive bank failures in this country. Despite the limited direct links between Turkey and the rest of the region’s countries, the exacerbation of financial turmoil in this country may encourage investors to reevaluate their investments in the region, which is very likely to cause capital outflows and currency devaluation. Due to high public and private debt, Central European countries are subject to financial pressure. Slowing down or abolishing structural reforms in Azerbaijan, Armenia, Belarus, Turkey and Ukraine will increase political uncertainty, and heightening tensions around Syria or Ukraine can lead to the imposition of new sanctions and undermine confidence in the region”, WB experts stress. NewsMaker