Economic Policies on June 16–30, 2011

Expenses and incomes

Moldovans spend more than 40 percent of consumer basket on foodstuffs…

NBS accounts reveal that available monthly incomes of population in the 1^st quarter of 2011 amounted to 1,352 Moldovan lei (MDL) (116 dollars) on average per person, by over 10 percent more than in the similar period of 2010. However, average monthly consumption-related expenses of population exceeded available incomes in the period concerned, up to over 1,420 MDL (122 dollars) per person, and increased by over 7 percent. Thus, people spend more than earn. Even more, about 70 percent of expenses go to foodstuffs, household services and clothes.

Salaries are the No.1 earning, about 49 percent of overall available incomes. Incomes from social indemnities contributed with 16.5 percent to earnings of households. Remittances from other countries are so far an important income source of households, completing earnings by about 15 percent, or by nearly 4 percent less than in the 1^st quarter of 2010.

Most of expenses — about 43 percent — went to food needs. Expenses for household services amounted to about 17 percent on average per person, and expenses for clothes and footwear amounted to 10 percent. Other expenses went to healthcare (more than 6 percent), transport (more than 6 percent), communications (4.6 percent), household appliances (3.2 percent), and education (1.2 percent). Urban population spent by about 662 MDL or 62 percent more than rural population. On the other hand, monthly consumption-related spending of urban population amounted to 1,717 MDL per person, by 515 MDL or 1.4-fold more than expenses of rural population.

Average incomes in Moldova do not cover minimum consumer basket…

Statistics also reveal that the minimum consumer basket^[1] in the 1^st quarter of 2011 was worth 1,471 MDL (126 dollars) on average per person, by about 10 percent more than in the 1^st quarter of 2010. The maximum consumer basket was recorded for population able to work — 1,551 MDL (133 dollars), especially men — 1,631 (about 140 dollars). The minimum consumer basket for retirees was worth 1,275 MDL (more than 109 dollars), which is nearly 87 percent of the average value per total population. The minimum consumer basket for children was worth 1,359 MDL (116.5 dollars) on average, but this indicator depended on the age of the child, from 578 MDL per baby under 1 year old up to 1,500 MDL per child who is 7–16 years old. It was mentioned above that available incomes of population in the 1^st quarter of 2011 amounted to 1,352 MDL on average per person. The proportion between average available monthly incomes per person and minimum consumer basket was about 92 percent. Therefore, medium incomes in Moldova do not cover the minimum consumer basket.

The medium salary on economy accounted for about 2,902 MDL in the 1^st quarter of 2011, by 9.5 percent more than in the similar period of 2010. The proportion between medium monthly wage and minimum consumer basket for population able to work depended on activities of national economy. The maximum coverage of minimum consumer basket for population able to work was reached by salaries of employees in financial sector — 3.7-fold, while the minimum level was recorded for wages of employees in fishing sector, which covered about 92 percent of the basket. The medium monthly pension set on April 1, 2011 was about 878 MDL, by over 12 percent more than in the similar period of 2010, and covered only 68 percent of the minimum consumer basket for this category of population.

External debt

Groundless speculations…

According to data provided by the National Bank of Moldova, Moldova’s external debt amounted to about 4.9 billion dollars on April 1, 2011, by over 12 percent more than early this year. Thus, the overall external debt accounted for about 82 percent of GDP, which was worth 5.8 billion dollars in 2010. It seems to be relatively good, despite speculations on this issue. More than 23 percent of the external debt belongs to the governmental sector. Despite the relative rise in 2009 and 2010 (indeed an absolutely normal dynamic following credits provided by foreign funders), it accounts for 1,137 billion dollars at present. More than 46 percent of the external debt comes from economic agents working in other sectors, more than 23 percent comes from governmental sector, and 4.2 percent from NBM, 8.5 percent from certified banks, and 17.6 percent represent commitments towards foreign investors.

NBM data reveal that Moldova’s external debt increased the most in 2005, 2006, 2007 and 2008. It increased by more than 10 percent in 2005, compared with 2004, by another 21 percent in 2006, compared with 2005, and reached a record rise by more than 32 percent in 2007, and by over 22 percent in 2008, compared with 2007. Therefore, speculations that not even our grandchildren will be able to pay off the debts are senseless. Even more, the overall external debt is now comparable with the amount recorded in late 2009, and even less. In addition, all payments for the external debt were honoured towards foreign creditors in the period concerned.

Foreign direct investments

Foreign investments are on the rise on background of economic crisis…

Foreign direct investments (FDI) in Moldovan economy turned over 101 million dollars in the 1^st quarter of 2011, and increased almost 1.5-fold compared with the similar period of last year (about 69 million dollars in 2010). According to the central bank, investments in statutory capital of enterprises increased by more than 26 percent in the period concerned, compared with the similar period of 2010, from 27.8 million dollars up to over 35 million dollars. At the same time, the net revenue from own capitals of shareholders (given the capital outflow) increased by about 36 percent. Reinvested revenue of non-residents increased nearly six fold, from 4.5 million dollars up to about 27 million dollars, and credits got by branches from mother societies rose by about 12 percent, from 34.2 million dollars up to 38.2 million dollars.

↑ The minimum consumer basket is calculated accordingly to the Regulation concerning the calculation of the minimum consumer basket, approved under Moldovan Government Decision No. 902 of August 28, 2000

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