Expert-Grup

Another Year of Economic Crisis for the Transnistrian Region: A 6% Recession in 2016 (Estimates)

Tuesday, 26 July 20168650 views
Another Year of Economic Crisis for the Transnistrian Region: A 6% Recession in 2016 (Estimates)

Automatically translated summary. The full article is available in Romanian.

Independent Think Tank “Expert-Grup” estimates that the economy of the Transnistrian region will shrink by about 5-6% in 2016, after a contraction of around 20% in 2015. The estimate appears in the latest issue of the “Regional Economic Review: the Transnistrian Region”, published with EU and UNDP support.

The 2016 recession is expected to stem from falling household consumption (5%), lower regional government consumption amid a budget deficit of about 15% of regional GDP, and a 10-12% drop in corporate capital investment. Adrian Lupușor said the region entered the crisis with large budget and current account deficits, a narrow tax base, high non-performing loans, outdated equipment and minimal currency reserves under a fixed exchange rate.

The artificial rate of the “Transnistrian rouble” caused a currency shortage, a black market where it lost up to 50%, and “food tourism”. Co-author Alexandru Fală called depreciation inevitable. The report names five risks for the next 2-3 years: a decapitalised banking sector, energy uncertainty, a costly administration employing nearly 45% of workers, industrial competitiveness problems and population decline.

View the original article in Romanian