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The economic growth of the Republic of Moldova did not increase the attractiveness to the investors

2018.04.25 Economie Victor Ursu Print version

The Republic of Moldova recorded an economic growth of 4.5% in 2017. However, despite the economy's maintaining in the positive territory, our country has not become more attractive to investors. For next year, economic growth is projected at 3.5%, and a massive investment flow is unlikely. It is the opinion expressed by journalist Victor Ursu in the show "15 minutes of economic realism".

The latest data from the NBM show that in 2017, the stock of direct investment assets amounted to USD 252.73 million, up 1.2 percent as compared to the end of 2016. Growth below potential as the Republic of Moldova needs investment massive job creation and exponential growth to generate added value.

"Although the economy returned to growth after the recession caused by the theft of the bill, foreign investors did not seem interested in coming. Under these conditions, there are fears that foreign investment will remain low for an extended period of time", says Victor Usru.

The main economic activities that benefited from foreign direct investment remained financial activities, insurance (26.1%) and manufacturing (25.3% of the direct equity equity equity stock).

"The small volume of foreign investments highlights several problems faced by the Republic of Moldova. It's about poor infrastructure, bureaucracy, corruption, and justice that lags, "Ursu said.

In the geographical distribution of direct investments in the form of equity participation, the majority share of the investors in the EU countries was 80.7%. Investors in CIS countries accounted for 6.3 percent of total accumulated capital.

On the other hand, the Republic of Moldova remains attractive for investors looking for cheap labor, but for the next years, it is necessary to increase the competitiveness of Moldovan products and services in order to cope with international competition.

In conclusion, Victor Ursu said that it is necessary to increase the attractiveness of the Republic of Moldova to foreign investors, as well as to improve the capacity to attract external financing, in the circumstances in which our country is dependent on external capital for financing the budget deficit.

The show is made by IDIS "Viitorul" in partnership with Radio Free Europe.

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