bne IntelliNews – Moldova’s foreign trade turns to industrial goods but shows a larger deficit
Moldova’s trade deficit widened by up to 22% year-on-year to $ 838 million, as reported by the statistics bureau, or 11% year-on-year to reach â¬ 698 million expressed in European currency, in the first quarter of 2021.
Exports grew 5.6% yoy to 612 million euros but imports jumped 13.6% yoy to 1.55 billion euros.
The deterioration of the country’s trade balance is significant and comes on top of an already high trade deficit (+ 12% y / y, expressed in euros) in the first quarter of 2020.
The trade gap in the rolling 12 months has exceeded 2.6 billion euros, or a quarter of the country’s GDP, although it has narrowed from 2.8 billion euros in March 2020. Good Although the trade balance has not deteriorated over the past year, its financing must have turned more precarious due to the scarcity of remittances from wages and external financing. The current account balance will provide a more accurate picture. However, the pressures on the exchange rate did not emerge until recently.
The deterioration of Moldova’s trade balance in the first quarter was largely caused by weak production in the agricultural sector: exports of food and live animals contracted by 38% year-on-year to 121.3 million (out of total exports of $ 712.7 million) and this category of goods went from a surplus of $ 19 million to a deficit of $ 71 million.
Another notable development is the growth of industrial goods in the country’s exports (and imports). Machinery and equipment exports soared 42% year-on-year to over $ 200 million and chemicals exports by 70%, with the two sectors contributing over 11pp overall to the export momentum. The drop in exports of food and live animals, however, made a similar but negative contribution.
The rise in industrial exports did not help the trade balance, on the contrary. The trade deficit of the two sectors widened by 2% (chemicals) and 25% (machinery) respectively to reach a total of 355 million dollars, or more than half of the total trade deficit (690 million dollars).