According to the latest official statistical data, the real earnings index in the third quarter of 2023 increased by only 5.9% compared to the same period in 2022. Even though the wages in both the budget and real sectors have increased to 10,192 lei and 13,099 lei, respectively, it has nevertheless continuously decreased due to inflation and price increases.
Even though inflation or the average price index is expected to decrease steadily during 2023, prices continue to rise, even faster than in other countries in the region. Thus, the inflation level for the first 11 months of 2023 was 14.3%. The price index for agricultural crop production decreased by 18.5 percentage points and for livestock production it increased by 3.8%. In other words, Moldova is failing to valorize and commoditize the surplus of agricultural products obtained from the 2023 crop. The loss of export markets, logistical and transport problems, lack of demand on the domestic market, and overproduction of crop products at the regional level have considerably reduced the value of agricultural production and created systemic problems for the country’s farmers.
In the industry things are even more complicated. In 2023 the industrial production price index increased by about 14 percent in comparison with the same period in 2022. Because of the tariffs for public utilities, as well as the exaggerated costs of energy products, industrial production in Moldova is losing competitiveness with similar products on both domestic and international markets. The continuing process will lead to the disappearance of some of Moldova’s traditional industries, especially the light industry, which is also facing labour shortages.
Thus, even if inflation is moderating due to the monetary measures adopted, the prices of agricultural and industrial products and public utilities continue to rise. According to international cost-of-living estimates (www.livingcost.org), the Republic of Moldova has seen the fastest growth in the cost of living in recent years, with the trend being in line with prices and costs in EU countries. The cost of living in Moldova is close to Romania and much higher than in Ukraine or the CIS countries, including the Russian Federation.
Paradoxically, but predictably, according to the same index, the Republic of Moldova did not improve its rankings on the corruption perception index – 107th place, nor on life expectancy – 133rd place, nor on the human freedom index – 64th place out of 197 countries assessed. These indicators demonstrate the lack of confidence in the future and the dashed hopes of the population.
Lex-Econ Consulting team
Lasă un răspuns