OREANDA-NEWS. October 30, 2014. When presenting the 14th quarterly report, called “Moldovan Economic Trends”, researcher Victoria Clipa said the economic growth projection made in early 2014 was revised down.

The key reasons for the revision were Russia’s embargo on Moldovan fruit and vegetables, the slowdown of Russia's economy; the military conflict in Ukraine; lower prices for foods on global markets; the drying inflow of remittances and weakening domestic demand.

The researchers have also lowered the projection for Moldova’s industrial production from 6.8% to 3.4% and expect the investment in long-term material assets to slow to 4.6% instead of 5.2% predicted. According to Victoria Clipa, in the first half of 2014, the investment activity weakened against the background of hostile investment environment which is unlikely to spur the investment in long-term material assets in the near future. The agricultural output in current prices is expected to increase from MDL 24.5 billion to MDL 25.3 billion, but expressed in comparative prices, it will be equal to zero in year-on-year terms.

The average inflation rate will reach 4.7%, the MDL/USD exchange rate will be 13.8 instead of 13.18 projected. The 2014 export volume will grow 6.4% to USD 2,552 million, the import increasing 1.1% to USD5,554 million. The growth in the export is expected to be favoured by the rich yield and enhancing competitiveness of Moldovan foods on the external market amidst the devaluation of the national currency.

The experts have kept the 2014 remittances projection unchanged at 3%. The average annual salary will be MDL 4,132 in 2014, up 9.7% in nominal terms and 5% in real ones. The share of the economically active population will change little, the unemployment rate climbing 0.1 p.p. to 5.2%. The researchers’ projections have been based on some on global economy projections. In particular, the average inflation will make 3.8%, the oil and gas prices will go down 6% and 2% respectively, the food prices reducing 6%. The 2014 global GDP growth is estimated at 3.4%.