# MOLDOVAN ECONOMIC TRENDS: DECEMBER 1999 

 

21 JAN 00 

FM AMEMBASSY CHISINAU 

 

1. THE DECEMBER ISSUE OF "MOLDOVAN ECONOMICTRENDS"

(MET) PUBLISHED BY THE EU'S TACIS AND THE MOLDOVANMINISTRY

OF ECONOMY AND REFORMS, UPDATES THE STATISTICS

CONTAINED IN THE NOVEMBER ISSUE.   HIGHLIGHTS AND 

COMMENTS FOLLOW. 

 

GROSS DOMESTIC PRODUCT 

---------------------- 

 

2. FOR THE FIRST HALF OF 1999 NOMINAL GDP AMOUNTED TO

MDL 4.118 BILLION, OR 16.8 PERCENT MORE THAN THE FIRSTHALF OF 

1998. FOR THE SAME PERIOD, REAL GDP DECLINED BY 5.3 

PERCENT. THE DECEMBER ISSUE DOES NOT PROVIDE ANY

LATER FIGURE FOR GDP. NOTE: ACCORDING TO PRELIMINARY

ESTIMATES PRESENTED BY THE MINISTER OF ECONOMY AND REFORMS, IN

1999  REALGDP DECLINED BY ABOUT 5 PERCENT. END NOTE. 

 

INDUSTRIAL OUTPUT 

----------------- 

 

3. OVERALL INDUSTRIAL OUTPUT IN JANUARY-NOVEMBER 1999

WAS MOLDOVAN LEI (MDL) 7.136 BILLION IN CURRENT PRICES. REAL 

OUTPUT DECREASED BY 9.7 PERCENT COMPARED TO THE

SAME PERIOD IN 1998. PRODUCTION DECLINED IN MANYSECTORS. OUTPUT

FROM THE FOOD AND BEVERAGES SECTOR DROPPED BY 22.2

PERCENT, INCLUDING DECREASES OF 21.9 PERCENT IN WINE, 26.9

PERCENT IN SUGAR, 16.2 PERCENT IN DAIRY PRODUCTS, AND23.4 PERCENT

IN BREAD. OUTPUTS OF TOBACCO, TEXTILES, AND CHEMICAL

PRODUCTS WERE LIGHTLY HIGHER THAN JANUARY-NOVEMBER 1998

LEVELS. 

 

AGRICULTURAL PRODUCTION 

----------------------- 

 

4. IN JANUARY-SEPTEMBER 1999 AGRICULTURAL PRODUCTION IN

 

CURRENT PRICES WAS MDL 4.076 BILLION. AGRICULTURAL

OUTPUT WAS 7 PERCENT LOWER THAN IN THE SAME PERIOD IN1998 DUE

TO A 9 PERCENT DROP IN THE CROP-GROWING SECTOR AND A 3

PERCENT REDUCTION IN ANIMAL PRODUCTION. 

 

INFLATION 

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5. THE CONSUMER PRICE INDEX SHOWED AN INCREASE OF 4.3 

PERCENT IN NOVEMBER. PRICES FOR FOOD INCREASED BY 4.7 

PERCENT, FOR NON-FOOD BY 3.3 PERCENT, AND FOR SERVICES

BY 4.3 PERCENT. ON A CUMULATIVE BASIS, CONSUMER PRICES

ROSE BY 36.9 PERCENT OVER THE FIRST ELEVEN MONTHS IN1999. 

 

6. ACCORDING TO THE DEPARTMENT OF STATISTICAL AND 

SOCIOLOGICAL ANALYSIS (DSSA), THE CPI INCREASED BY 5

PERCENT IN DECEMBER. DSSA REPORTED THAT CONSUMER PRICESFOR

THE  WHOLEYEAR ROSE BY 43.7 PERCENT ON A CUMULATIVE BASIS 

(DECEMBER 1998 TO DECEMBER 1999). A RECENT DSSA

REPORT SHOWED A 39 PERCENT AVERAGED ANNUAL INFLATIONRATE. 

 

CURRENCY DEPRECIATION 

--------------------- 

 

7. AFTER THE LEU'S PERIOD OF STABILITY FROM JULY TOEARLY 

OCTOBER, A NEW DEPRECIATION TOOK PLACE IN NOVEMBER,

1999.  BYNOVEMBER 18 THE OFFICIAL EXCHANGE RATE REACHED A

PEAK OF  MDL12.61 PER 1 USD. HOWEVER, THE COMMERCIAL EXCHANGE

RATE FELL TO MDL 13.45 PER 1 USD. IN JANUARY-NOVEMBER1999 THE

 

LOCAL CURRENCY WEAKENED BY 40.6 PERCENT AGAINST THE

U.S.  DOLLARAND BY 11.4 PERCENT AGAINST THE RUSSIAN RUBLE. 

 

GOVERNMENT BUDGET 

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8. IN JANUARY-NOVEMBER 1999 THE CONSOLIDATED BUDGET 

RECEIVED MDL 2,602.8 MILLION, INCLUDING MDL 111.5MILLION 

GRANTS FROM OFFICIAL DONORS. CONSOLIDATED

EXPENDITURES REACHED MDL 2,916.3 MILLION FOR THE SAMEPERIOD. THE 

GOVERNMENT SPENT MDL 701.2 MILLION ON DEBT SERVICING, 

INCLUDING MDL 327.4 MILLION ON DOMESTIC DEBT AND MDL

373.8 MILLION ON EXTERNAL DEBT SERVICING. BY THE FIRSTOF 

DECEMBER 1999, BUDGET CASH DEFICIT TOTALED TO MDL 313.5

 

MILLION. EXTERNAL BORROWING FOR THE BUDGET DEFICIT 

FINANCING AMOUNTED TO MDL 240.8 MILLION. 

9. ACCORDING TO THE LAW, THE ANNUAL BUDGET SHOULD

HAVE BEEN ADOPTED BY PARLIAMENT BEFORE DECEMBER 5.HOWEVER,

DUE TO THE GOVERNMENTAL CRISIS, THE 2000 BUDGET WAS NOT

ADOPTED ON TIME. NOTE: THE 2000 BUDGET DRAFT SHOULD BESUBMITTED

TO PARLIAMENT FOR CONSIDERATION SOMETIME IN FEBRUARY

2000. THE LAW REQUIRES PARLIAMENT TO HAVE THREE READINGS

BEFORE IT CAN PASS THE BUDGET. END NOTE. 

 

EXTERNAL SECTOR 

--------------- 

 

10. IN JANUARY-NOVEMBER 1999 EXTERNAL TRADE DROPPED

TO USD 911.4 MILLION, WITH USD 415.4 MILLION IN EXPORTSAND USD 496

 

MILLION IN IMPORTS. THE TOTAL TRADE FIGURE WAS ALMOST

HALF THE AMOUNT IN THE SAME PERIOD IN 1998. THE RATIO OF

EXPORTS TO IMPORTS WAS 84 PERCENT IN JANUARY-NOVEMBER1999,

COMPARED TO ONLY 63 PERCENT IN THE SAME PERIOD OF 1998. 

 

11. THE TRADE DEFICIT REACHED USD 80.6 MILLION IN THEFIRST 

ELEVEN MONTHS OF 1999, THE LOWEST FIGURE COMPARED TO

THE SIMILAR PERIODS OF 1994-1998. A POSITIVE TRADEBALANCE

WAS REGISTERED IN NOVEMBER 1999. IN SEPTEMBER-NOVEMBER

1999 MONTHLY EXPORT VOLUMES EXCEEDED THOSE OF 1998.THIRTY

SIX PERCENT OF TOTAL EXPORTS IN THE FIRST ELEVEN MONTHSOF

1999 WERE TRADED IN AUTUMN.