Economic Policies on August 1–31, 2011

Labour market

Statistics say unemployment rate is falling down, while number of jobseekers is on the rise

According to NBS data, the economically active population (employed population plus jobseekers) of Moldova accounted for 1,328,700 people in the 1^st quarter of 2011, by 1.5 percent (20,900 people) less than in the 1^st quarter of 2010. The structure of active population changed as follows: the share of employed population increased from 93 percent up to 93.8 percent, while the share of jobseekers decreased from 7 percent down to 6.2 percent.

No major disparities of genders and areas were observed for economically active population: the share of men (52.3 percent) exceeded the share of women (47.7 percent), and the share of economically active population in rural areas was higher than in urban areas (52.5 percent vs. 47.5 percent).

Employment rate of people aged at least 15 years (share of active population aged at least 15 years in the overall population aged at least 15 years) was 44.7 percent and decreased compared with the same quarter of the precedent year (45.5 percent). This indicator was higher for men — 49.2 percent — than for women — 40.5 percent. The employment rate of population with ages admitted for employment (16–56 years old for women and 16–61 years old for men) was 52.4 percent.

The employed population accounted for 1,246,100 people, by 0.7 percent less than in the 2^nd quarter of 2010. Like for economically active population, no gender disparities were observed (48.1 percent for women and 51.9 percent for men). These accounts concern areas (46.7 percent for cities and 53.3 percent for villages). The employment rate for people aged at least 15 years (share of employed population aged at least 15 years compared with the overall population of the same ages) was 41.9 percent, and dropped by 0.4 percent compared with the 1^st quarter of 2010. The employment rate of population with ages admitted for employment (16–56/61 years) was 48.9 percent, population of ages 15–64 years — 46.3 percent, and the indicator for ages of 15–29 years was 29.2 percent.

According to the distribution on activities in domestic economy, about 388,000 persons (more than 31 percent of the overall number of employed population) were employed in agriculture sector. The number of population employed in agriculture dropped by 24,400 people or about 6 percent, compared with the 2^nd quarter of 2010. More than 858,000 persons were employed in non-agricultural activities, which is by over 15,000 people or about 2 percent more than in the 2^nd quarter of 2010. The share of people employed in industry was 12.6 percent, and another 5.8 percent was employed in the building sector. More than 50 percent of employed population worked in the service sector, and their number increased by 1 percent, compared with the 2^nd quarter of 2010.

More than 13 percent of the overall number of people employed in economy worked in the informal sector, and about 33 percent had informal jobs. Salary-earners count for 25 percent of the number of informally employed people, and more than 12 percent of the overall number of salary-earners had informal jobs.

The number of jobseekers estimated accordingly to the methodology of the International Labour Office accounted for 82,600 people, by 11,900 people less than in the 2^nd quarter of 2010. The unemployment hit more men — 59 percent of the overall number of jobseekers, as well as urban population — more than 60 percent. The unemployment rate (share of ILO jobseekers in active population) on country was 6.2 percent, and declined compared with the 2^nd quarter of 2010 (7 percent).

Public funds

Radical measures used to increase budget collections…

The Ministry of Finance has recently published on its website a draft amendment and completion to the Fiscal CodeRO, which seeks indirect taxation methods and their introduction starting January 1, 2012, despite contradictory opinions of AIE about their enforcement in Moldova. According to the ministerial draft, the indirect methods aimed to estimate the taxable revenue of individuals are “methods used to establish the taxable income estimated on the basis of an analysis of the fiscal condition of individual, by using information from a large range of sources, not only fiscal reports of the individual concerned.”

Subjects of the estimation are individuals who are residents of Moldova, citizens of Moldova who are not entrepreneurs and:

during a fiscal year get assets (real estates, securities, transports, currency) worth one million lei altogether, except for individuals who are owners of real estate which was being built before January 1, 2012, but registered it with the cadastral body after this date;
During a fiscal year operate individual spending of more than 300,000 lei, except for expenses indicated above.

Some parliamentary parties criticised the budgetary-fiscal policy drafted by the Ministry of Finance. On the other hand, the ministry assured that these taxation methods do not concern the money earned abroad and do not bring an additional tax, but come to identify individuals who own assets and properties but do not pay income taxes. For example, the Romanian Government approved indirect taxation methods without any problem. Thus, starting January 1, 2011 Romania introduced taxes on incomes from unidentified sources of individuals.

Census of employees in public sector — measure to optimise expenses…

Elsewhere, a previous issue said earlier this year that 2011 should be the year to optimise public funds. Thus, the Government decided to hold a census of employees in public sector and staff-related spending, an action which is welcome, but should focus on planned goals and should be implemented till the end.

The census will cover all salary-earners from public institutions and will count employees of all institutions funded from the National Public Budget, including the state budget, budget of administrative-territorial units, state social insurance budget, and healthcare insurance fund.

In order to conduct the census, public institutions will fill up an application and a related annex, respecting methodological indications which will be included into a package of documents attached to a letter for each institution. The package of documents and annex will be sent to the central or local public authority in charge with institutions concerned.

Banking system

Shifts on banking market — rating falls…

The Investment Consulting Agency EVM Consulting has recently worked out a new research and rated the bank performance for the first half of 2011. It reveals a strong growth of overall return and total net income on banking system, by 13.7 percent and 10.3 percent respectively, compared with the similar period of 2010. On the other hand, some interesting changes in the bank performance rating were observed, compared with the 1^st quarter of 2011.

In particular, BCR Chisinau fell down 11 places in the rating in the 2^nd quarter, from the 3^rd place at the end of the 1^st quarter of 2011 down to the 14^th place. There was a repetition of the situation observed in the 3^rd quarter of 2010, when BCR fell from the 3^rd place down to the 15^th place. According to EVM Consulting, the bank failed to manage expenses as well as it has done in the 1^st quarter, and it got a profit worth 99,500 lei only. As well, the bank could not achieve a high shareholder capital and incomes.

At the same time, Eximbank-Gruppo Veneto Banca fell 6 places down to the 12^th place, like in the 1^st quarter of 2010. Banca Sociala and the Savings Bank dropped 5 and 3 places respectively, down to the 10^th and 11^th places in the rating.

The bank performance top was headed again by Moldova Agroindbank, leader of sub-ratings in terms of “overall return”, “net revenue”, ROE and ROS. This bank reported the highest return on equity (ROE) and return on sales (ROS), respectively 9.3 percent and 29 percent. Victoriabank regained the 2^nd place, which it keeps since the 2^nd quarter of 2010. The Savings Bank, which was ranking the 8^th place three months ago, fell three places down to the 11^th in the 2^nd quarter.

Comertbank climbed 5 positions, up to the 6^th place. There are some evolutions in the middle and bottom of the rating. Banks which climbed in the rating for the first six months of this year include Mobiasbanca — Groupe Societe Generale (+3 steps, up to the 4^th place), Moldindconbank (+1 step, up to the 3^rd place), EuroCreditBank (+5 steps, up to the 9^th place), Unibank (9 steps, up to the 5^th place), Energbank (+3 steps, up to the 7^th place), Fincombank (+1 step, up to the 8^th place). Procreditbank and Universalbank ranked the same place like in the 1^st quarter of 2011, respectively the 13^th and the 15^th. It is worth recalling that starting this year the independent think tank Expert-Grup works out a quarterly bank performance ratingRO.

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