Budget Revision 2017: Main Changes
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Automatically translated summary. The full text is available in Romanian.
The October 2017 budget revision in the Republic of Moldova was driven chiefly by the suspension of external financing, while better-than-forecast macroeconomic indicators also played a part. The Independent Think Tank “Expert-Grup” analyses the factors behind the changes to the National Public Budget for 2017.
External partners suspended a significant share of funding for Moldova around mid-2017, owing to technical problems in implementing some projects and to the authorities’ failure to meet reform conditions. Improved macroeconomic indicators also mattered. In the first half of the year, wages rose by 12.3% year on year in nominal terms and remittances by 9.7%. Household final consumption grew by 4% and contributed 87.8% to GDP, boosting tax revenues.
Other indicators fell short of forecasts: GDP grew by only 2.8%, industrial output by 0.3%, agricultural output fell by 5%, and investment in long-term tangible assets rose by 2.5%. With such anaemic growth, revenue growth, especially tax revenue, could slow significantly in the coming years. Without the favourable conditions, the October revision would have looked entirely different.
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