IMF: Moldova’s Economy Will Shrink by 3% in 2020, but Increase by 4.1% in 2021

The International Monetary Fund (IMF) has substantially revised estimates of the development of the Moldovan and world economies this year, in the context of the coronavirus pandemic. This is stated in the latest World Economic Outlook report published on Tuesday by the international financial institution, mold-street.com writes. Thus, if in October last year the IMF predicted that 3.8% growth will be registered in Moldova in 2020, then in April, according to new forecasts, the international financial institution expects a 3% decline in the economy of Moldova in 2020, but in 2021, an increase of 4.1% will be recorded. At the same time, according to estimates, the current account deficit of Moldova will be reduced to 8.3% of the gross domestic product in 2020. In 2021, the deficit will increase to 10.1%, according to the report. It is expected that inflation in Moldova in 2020 will amount to only 0.5%, and by 2021 it will increase by 6%. The new IMF estimates are much more pessimistic than the estimates of the World Bank, which last week predicted that the economy would grow by 0.1% in 2020. The World Bank also expects a bounce back to 3.8% in 2021. The authorities recently announced that they expect a decrease in GDP of about 3%, but also take into account a more pessimistic evolution with a more significant decline in economic indicators. On the other hand, new IMF forecasts show that Moldova will not suffer from the crisis as much as most countries in the region. For example, Romania’s GDP will decrease by 5%, Russia’s – by 5.5%, and Ukraine – by 7.7%. In 2020, the global economy is expected to shrink by 3%.