Moldova’s exports increased by 5% y/y to €454mn in Q2, losing momentum from the 31% y/y advance in Q1, according to calculations based on data released by the statistics bureau BNS. Imports rose by 17% y/y, resulting in a 29% higher trade gap for the quarter compared to last year.

The country’s trade gap had already widened by 17% y/y to €472mn in Q1 and the €591mn gap in Q2 (29% up y/y) resulted in a significant deterioration of the external balance. 

The trade gap in the rolling 12 months ending June 2017 increased by 11% y/y to €1.96bn, and accounted for 32% of the country’s GDP. A large part of the trade gap is traditionally financed from wage remittances in Moldova. In the rolling 12 months ending June, the coverage ratio was 52% according to bne IntelliNews calculations (from a similar ratio of 53% calculated at the end of June 2016) as wage remittances increased by 6% y/y to $1.13bn in the period. The sharp widening of the trade gap in Q2 has thus not yet resulted in a significant deterioration of the coverage ratio.

Moldova’s exports to the European Union increased by 5% y/y in Q2 — a visible deceleration from the annual growth rates of over 30% y/y in the previous two quarters. Nonetheless, exports to the EU accounted for 63% of total exports in the quarter.

Total exports in the rolling 12-month period ending June increased by 17% to €1.99bn, accelerating to the highest advance in nearly five years. Exports to the EU increased by 23% y/y to €1.29bn in the 12-month period. In contrast, the exports to Community of Independent States (CIS) increased by only 3% y/y, to €406mn in the period.

FOREIGN TRADE
EUR mn	2012	2013	2014	2015	2016	Q1/17	Q2 17
Total exports	1,672	1,824	1,772	1,773	1,849	496	454
CIS	719	695	556	444	374	99	101
EU	783	853	945	1,097	1,205	315	287
Other	170	276	272	232	270	81	66
Total imports	4,033	4,127	4,036	3,598	3,632	968	1,045
CIS	1,253	1,256	1,101	918	929	255	247
EU	1,797	1,858	1,946	1,765	1,782	461	529
Other	983	1,013	989	915	921	252	270
Total balance	-2,360	-2,303	-2,264	-1,825	-1,784	-472	-591
y/y	2012	2013	2014	2015	2016	Q1/17	Q2 17
Total exports	5%	9%	-3%	0%	4%	31%	5%
CIS	9%	-3%	-20%	-20%	-16%	29%	11%
EU	1%	9%	11%	16%	10%	31%	5%
Other	11%	62%	-2%	-15%	16%	36%	-5%
Total imports	8%	2%	-2%	-11%	1%	24%	17%
Total balance	11%	-2%	-2%	-19%	-2%	17%	29%
Source: BNS, Intellinews