Page 135 - SE Outlook Regions 2024

35.9%. 1.2pp of the decline is caused by lower social security spending (fewer energy subsidies) but most of the ministries will see modest nominal advance in their budgets as of 2024.
Moldova’s public deficit is planned at MDL15.8bn, or 4.6% of GDP – down from an estimated value of MDL18.5bn (5.9% of GDP) in 2023.
The deficit financing will rely heavily on domestic borrowing and from operations with financial assets mostly recovery of funds extended in the past, such as the capital increase operated at Energocom to provide funds necessary for gas imports. Domestic borrowing will decrease nominally and as a share of the public deficit (30%) but besides the financial assets operations (37% of public deficit) will finance two-thirds of the general government’s deficit. The net flow of foreign loans will decrease from 2.9% of GDP in 2023 to 1.2% of GDP in 2024, covering only 26% of the public deficit (49% in 2023).
The general government budget deficit in Moldova widened to MDL8.24bn (€425mn) in January-September 2023, more than four times compared to the same period in the previous year.
The deficit reached 2.6% of the projected full-year GDP, more than three times the 0.7% in the same period of 2022.
Moldova’s budget execution is significantly back-loaded, with the deficit rising in the last quarter of the year as much as the country’s financial resources allow it. In 2022, the gap rose from 0.7% of GDP in January-September to 3.2% of GDP in the full year (half of the 6.4% of GDP target, though, due to limited financing resources). For 2023, the government targets a 6% of GDP (MDL18.5bn) deficit, but the actual figure again depends on the financing resources.
Moldova is seeking supplementary financing, Prime Minister Dorin Recean said in October 2023: MDL2bn for the year’s deficit and MDL7.5bn for 2024, PM Recean announced during the Moldova Support Platform conference in Chisinau.
Moldova’s moderate public indebtedness increased marginally to 31.5% of the year’s expected GDP at the end of September 2023, compared
135 SE Outlook 2024 www.intellinews.com