Expert Group launched a new issue of MEGA magazine about the country's economic recovery during the period 2016-2017

On December 8, the Independent Think-Tank Expert-Grup launched the 15th edition of MEGA magazine, entitled "Economic recovery of 2016-2017 – a sustainable path or iceberg effect?". According to the experts, although the economic year 2016 was a more favorable one compared to 2015 and the forecast for 2016-2017 estimates an economic growth of about 3-4%, the competitiveness and sustainability of this growth remain to be the major challenges of the coming year.

Adrian Lupușor, Executive Director of Expert-Grup and co-author of the publication, said during the event: "The main immediate challenge consists in the risk that the economic policy makers could be misled by the economic trends, which look relatively good on the surface, but contain many worrying subtleties. Thus, despite the anticipated positive economic growth for 2017, the authorities should not increase the fiscal burden. They should, at the same time, ease the monetary policy more actively and be very cautious in promoting fiscal austerity".

As to the medium and long-term challenges, the authors warn about the low level of labor productivity, which undermines the competitiveness of the Moldovan economy, both in terms of labor price and quality, leading in its turn to the country's inability to fully harness the potential of the DCFTA with the EU. On the long term, the balance of payments deficit, aggravated by the high level of external debt (which is almost equivalent to the GDP) and by the modest inflows of foreign direct investment (Moldova traditionally holds the lowest positions in Europe by FDI per capita) entails risks for the country's macroeconomic stability.

As a solution, the authors recommend balancing the current account deficit and stimulating investment by removing the top 3 barriers to foreign investors (I) corruption; (II) policy instability and (III) political instability. These can be removed by long-term consolidated efforts, based entirely on a firm political will.

You can read the Romanian version of the publication HERE.

source: www.expert-grup.org