Private Expenditure: Household consumption remains the key pillar of economy growth, representing --.- of GDP in H---. After declining by -.- during the recession of ----, consumer confidence is gradually on the mend and we expect a rebound to modest growth of -.- in ----. ...After declining by -.- during the recession of ----, consumer confidence is gradually on the mend and we expect a rebound to modest growth of -.- in ----. Easing inflation, improving banking sector stability (following the --------- crisis), and steady remittance inflows should support an accel- eration in household consumption in the coming years, though the long-term annual growth average of -.- is considerably below the -.- figure recorded in the --------- period. With the economy heavily dependent on the agricultural and agro- processing sectors, consumer spending will remain exposed to climate shocks over the forecast period. ...Despite this, and not withstanding ongoing budget- ary constraints and political risks, we expect gross fixed capital formation to bounce back in the coming years given Moldova s low production costs and privileged access to the EU market via the Deep and Comprehensive Free Trade Area agreement signed in ----. Business-friendly reforms �encouraged as part - Business Monitor International Ltd www.bmiresearch.com
...---- ---- ----f ----f ----f ----f ----f ----f ----f ----f ----f ----f Net exports of goods and services, MDLbn ---.- ---.- ---.- ---.- ---.- ---.- ---.- ---.- ---.- ---.- ---.- ---.- Net exports of goods and services, of GDP ---.- ---.- ---.- ---.- ---.- ---.- ---.- ---.- ---.- ---.- ---.- ---.- ...Debt service costs rose to -.- of GDP in ----, from -.- in ----, and will rise further in the --------- period. This means deeper spending cuts are needed to reduce the deficit to a more sustain- able level, and we expect this to translate into a smaller budget for capital investment projects due to the political resistance for cuts to public sector wages or social spending. Revenue growth should remain steady, supported by external grants and rising tax revenues as domestic demand growth accelerates over the medium term forecast period. ...That said, we forecast revenues to level off at --.- of GDP over the ---year period. Government Share Of GDP: Government expenditure ac- counted for --.- of GDP in ----, down from --.- in ---- but still high compared to the average for Europe and Central
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