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BRITTLENESS STABILITY NATIONAL PUBLIC BUDGET OF THE REPUBLIC OF MOLDOVA

Rodica Perciun () and Viorica Popa ()
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Viorica Popa: National Institute for Economic Research, Republic of Moldova

Institute for Economic Forecasting Conference Proceedings from Institute for Economic Forecasting

Abstract: In this paper, the authors examine the state of public finances in the Republic of Moldova in recent years, in terms of financial stability indicators. Article aims to identify weaknesses and risks in public finance by presenting recommendations for remediation. Therefore, the worsening economic situation in Moldova in recent years has had a negativ impact on the fiscal year 2015. The financial destabilization of the banking sector, reduced remittances, shrinking exports and imports, depreciation of national currency are several factors that influenced negatively on the completion of the National Public Budget registering in 2015 less budget revenues than expected. Respectively, the tightening of monetary policy by the National Bank of Moldova was pushing the average weighted interest rate on state securities by 3 times compared to 2014. And the country's economic risks have caused the slowing of external grants by 51.7% compared to the same period of the last year. Therefore, foreign assistance has been discontinued due to lack of the program with the International Monetary Fund. In this context, we emphasize that the deterioration of budgetary stability has led to increased cost of funding, but with an impact on economic performance in the medium term. Thus, we consider as a challenge for 2016 the implementation of reforms that would increase the efficiency of public finance management and to counteract the pressures of damage of the structural component of the budget deficit.

Keywords: public finance; national public budget; planning; revenues; expenditures; deficit; devaluation; risks. (search for similar items in EconPapers)
JEL-codes: G28 H2 H3 H6 H7 (search for similar items in EconPapers)
Pages: 6 pages
Date: 2016-11
New Economics Papers: this item is included in nep-cis and nep-tra
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