PPG debt covers gross debt of the general government. SOEs external debt is only included if it is explicitly guaranteed by the government. Both on-lending to the private sector (operationalized through commercial banks) and to SOEs are part of public guarantees and are included. Debt of SOEs (majority owned by the state) with maturity longer than a year accounts for 1 percent of GDP as of 2018. In line with the DSA guidelines, public debt includes liabilities towards the IMF. Staff and the authorities will continue working towards expanding debt coverage for local governments’ debt, SOEs and PPPs to include all existing debt obligations. Due to the lack of data, information on PPPs is currently limited. The change in coverage complicates intertemporal analysis of PPG debt The contingent liabilities shock from SOE debt is set at the default value of 2 percent of GDP to reflect risks associated with borrowing of SOEs majority owned by the state, while a contingent liability shock of 12 percent of GDP is meant to also capture risks from PPPs and SOEs that are partially owned by the state.
The breakdown of the total PPG domestic debt excludes the bonds related to the capitalization of banks.
NBM is working continuously on improving the coverage of private sector debt. This explains the changes in historical debt numbers from period to period.
In 2018, Moldova’s National Bureau of Statistics (NBS) published revised GDP series for 2016 and 2017, based on new methodology to reflect: a) implementation of the UN’s System of National Accounts 2008 (2008 SNA) and the European System of Accounts 2010 (ESA 2010); and b) statistical improvements regarding data sources and compilation methods. The changes were introduced with technical assistance from the Fund. As a result of the new methodology, the level of both nominal and real GDP was revised up by about 17 percent. The sizeable GDP revision implies a reduction in key macroeconomic ratios (including debt-to-GDP ratios).
Some fiscal measures for 2020 are not presently included into staff’s projections due to the costing ambiguity. These measures could potentially yield about 0.3-0.6 percent of GDP in revenue.
While this assumption is not based on concrete borrowing plans in the longer-term, it reflects the baseline assumptions, under which Moldova will continue to borrow into the future to finance productive infrastructure investments.
The World Bank’s Country Policy and Institutional Assessment (CPIA).
Remittances for Moldova comprise of two Balance of Payments (BoP) accounts: compensation of employees and remittances.
Moldova’s Composite Indicator (Cl) is 3.34, which corresponds to a strong debt-carrying capacity as confirmed by the April 2019 WEO data and 2018 Country Policy and Institutional Assessment (CPIA).