OREANDA-NEWS. January 14, 2015. In their review, called Economic Reality of Transnistira (Rom: Realitatea Economica Transnistreana) experts say that following the downward trend in early 2013 the economy of the Transnistrian region showed the first signs of recovery.

However, the upward trend was explained by the compensatory increase in the metallurgic and energy sectors caused by the resumption of steel production at Ribnita Steel Works and by the growth in the agricultural sector spurred by favourable weather conditions. As a result, over the first 9 months of 2014, the foreign trade in the region improved considerably, the exports and imports growing 48% and 8.9% respectively, the agricultural production increasing 12.2%. At the same time, the year of 2014 was characterized by weak investment activities, which encouraged economic uncertainty in the region.

Over the first 9 months of 2014, the capital formation reduced 2.6%, the Q3 decline amounting to 13.2%. To compare, in the right-bank Moldova, investment increased 2.1% over the first 9 months of 2014 and 1.4% in Q3, 2014. Besides, the monetary stock in Transnistria decreased in the reporting period, reflecting contraction in consumption. In particular, the balance of monetary stock shrank by 5.8% in the region, whereas in the right-bank Moldova it increased by 13.6%. Expert Grup believes that the region requires structural reforms to induce investment and consumption.

The reforms should focus on the improvement of an investment climate to encourage the SME sector, raise confidence in the banking sector and facilitate access of enterprises of the region to lending. The greatest importance should be attached to the resumption of the dialogue between the authorities of Chisinau and Tiraspol with regard to technical and non-political issues including the implementation of minimum requirements of the EU-RM association agreement. These concern the following three key areas: harmonization of the quality infrastructure; compliance with the origin of products requirements and transparency of the state aid distribution. According to the experts, with these measures not taken, the economy in the region may slow down 3%-5% in 2015 and enter a long-lasting recession.