Moldova flag Moldova: Economic and Political Overview

The economic context of Moldova

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Moldova's economic performance has been relatively strong over the past few years but has been repeatedly hindered by the unfavourable global situation or by poor climatic conditions. After Moldova's economy collapsed due to the COVID-19 outbreak, GDP went back to its pre-pandemic level in 2021. According to the latest figures from the National Bureau of Statistics, In January-September 2022, the country’s GDP amounted to MDL 197,8 billion, decreasing in real terms by 4.1% compared to the same period one year earlier. In sectoral terms, agriculture decreased by 1.5%, construction by 1.1%, real estate by 0.8%, and manufacturing by 0.7%. For the year as a whole, the IMF estimated GDP growth to be stagnant (0%). As both the internal and external contexts improve, growth is expected to pick up this year (2.3%) before accelerating further in 2024 (5.8%).

Concerning public finances, the debt-to-GDP ratio increased to 36% in 2022 (from 33.1% one year earlier) and is expected to follow an upward trend over the forecast horizon, reaching 38.3% in 2023 and 41.7% in 2024 according to the IMF. Governmental figures show that the general budget was negative by 5.4% of GDP last year, whereas the proposed 2023 budget foresees a rise in the deficit, projected at around 6% of GDP. Demand-side drivers added to the significant supply-side factors that have shaped inflation over the past year: although it slowed in the last quarter of 2022, the average annual inflation rate was estimated at 28.5% by the IMF. The Central Bank decided to cut the monetary policy rate by 1.5pp to 20% on December 5, stating that the monetary policy relaxation would continue if future inflation data confirm its expectations. For 2023, the IMF forecasts inflation to ease to 13.8%, with a more consistent decrease expected for 2024 (5%). Over the longer term, Moldova's economy still has to face many challenges, including corruption, political uncertainty, weak administrative capacity, energy import dependence, Russian political and economic pressure, heavy dependence on agricultural exports, and unresolved separatism in Moldova's Transnistria region.

The country’s unemployment rate is relatively stable, hovering around 3.5%; however, the jobless rate is higher in urban areas than in rural areas. Moldova remains the poorest country in Europe and has one of the lowest productivity levels: in 2022, the GDP per capita was estimated at USD 16,483 by the IMF, 70% lower than the European Union’s average.

 
Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 14.5516.0017.1617.9419.06
GDP (Constant Prices, Annual % Change) -5.02.04.35.05.0
GDP per Capita (USD) 5,7266,4117,0027,4498,059
General Government Gross Debt (in % of GDP) 32.635.138.437.436.9
Inflation Rate (%) n/a13.35.05.05.0
Unemployment Rate (% of the Labour Force) 4.64.94.24.24.2
Current Account (billions USD) -2.09-1.94-1.86-1.78-1.79
Current Account (in % of GDP) -14.4-12.1-10.9-9.9-9.4

Source: IMF – World Economic Outlook Database, October 2021

Main Sectors of Industry

Even if its impact on the country´s GDP has decreased over the past years, the agriculture sector is key to Moldova's economy: it still represents 10.4% of the GDP and employs nearly 21% of the workforce (World Bank, latest data available). Farmlands cover 2.48 million hectares or 75% of the country’s territory, including 1.82 million hectares of arable land (National Bureau of Statistics). Moldova's main products are vegetables, fruits, grapes, grain, sugar beets, sunflower seeds, tobacco, beef, milk and wine. In recent years, the government of Moldova has made efforts to modernize and improve the efficiency of the agricultural sector. This has included investments in new equipment and technology, as well as the implementation of policies aimed at improving land use and increasing agricultural productivity. However, the agricultural sector still faces some challenges, including limited access to financing and a lack of infrastructure in rural areas. According to data from the statistical office, Moldova’s agricultural output fell by 29.8% in 2022, mainly due to a significant decrease in plant production (-26.8%) and livestock production (-3.6%).

The secondary sector represents 20.6% of the GDP, employing 22% of the active population. Traditionally, the country’s main industries have been manufacturing, agriculture and food processing, textile, apparel and footwear. The manufacturing industry alone is estimated to contribute 9% of the country’s GDP. The government of Moldova has implemented policies aimed at supporting the growth of the industrial sector, including tax incentives for investors and efforts to improve the business environment. The National Bureau of Statistics states that Moldova's industrial production fell by 5.1% year-on-year in 2022 (manufacturing decreased by 4.5% and mining by 4.9%).

The GDP structure is progressively turning towards services, to the detriment of heavy industry and agriculture. The tertiary sector now represents 54.9% of the GDP, employing more than half of the workforce (57%). It is driven by the insurance, legal consultancy and telecommunications sectors. The ICT sector is also growing. The finance sector in Moldova has undergone significant reforms in recent years, with efforts to strengthen regulation and supervision, increase transparency and accountability, and promote competition. Moldova has also made efforts to improve its transportation infrastructure, including through investments in roads, railways, and airports, in order to support the growth of the services sector. According to data from the National Bureau of Statistics, the retail trade turnover decreased by 1.8% y-o-y in 2022, while that of wholesale trade increased by 25.9%. Concerning the tourism sector, the country welcomed almost 334k tourists in 2022 (1.9 times more than the previous year) of which 51,5% were residents and 48,5% were non-residents.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 37.6 16.5 45.9
Value Added (in % of GDP) 7.9 20.0 58.0
Value Added (Annual % Change) -25.8 -10.2 -0.3

Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.

 

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Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.}}

Score:
62,5/100
World Rank:
85
Regional Rank:
41

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 
 

Country Risk

See the country risk analysis provided by Coface.
 

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Sources of General Economic Information

Ministries
Ministry of Economy of the Republic of Moldova
Statistical Office
National Bureau of Statistics of the Republic of Moldova
Central Bank
National Bank of Moldova
Stock Exchange
Moldova Stock Exchange
Economic Portals
Government of Republic of Moldova
The World Bank in Moldova
 

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Latest Update: December 2023