ON THE BUOYANCY OF TOTAL BUDGET REVENUES IN MOLDOVA: ECONOMETRIC ESTIMATES AND REVENUE FORECASTS

Abstract

An economy’s total budget revenue is a key variable for the efficient design and conduct of economic policy and for maintaining fiscal and debt sustainability. Following a brief analysis of the notion of the buoyancy of total budget revenues and its estimation, the paper estimates the buoyancy of total revenues in the Moldovan economy using quarterly data on total budget revenues and Gross Domestic Product for the period from the first quarter of 2016 to the fourth quarter of 2025, thereby providing updated country-specific evidence based on high-frequency data. The empirical work reported in the paper suggests that the buoyancy of total budget revenues in Moldova’s economy is close to 1.06. The paper then forecasts the medium-term evolution of total budget revenues using quarterly Gross Domestic Product forecasts from an estimated time series model. The total revenue forecasts are lower than the Ministry of Finance’s latest forecasts. The paper suggests regularly updating the buoyancy estimate and revenue forecasts for both monitoring and forecasting purposes.