Economic and Political Overview

flag Moldova Moldova: Economic and Political Overview

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline | COVID-19 Country Response

 

Economic Indicators

Moldova's economic performance has been relatively strong over the past few years but has been repeatedly hindered by the unfavorable global situation or by poor climatic conditions. After the economy collapsed due to the COVID-19 outbreak, GDP returned to its pre-pandemic level in 2021. The economy continues to be burdened by spillovers from the war. After contracting by 5% in 2022, GDP experienced a further decline of 2.3% in the first half of 2023. Thanks to a recovery in the second part of the year, GDP grew an estimated 0.7%, according to official governmental figures. The IMF anticipates GDP growth of 4.3% this year and 5% in 2025, driven by robust agricultural production and a resurgence in consumption and investment. This growth is expected to be fueled by the recovery of real wages and remittances, along with an improvement in risk perceptions.

Concerning public finances, in 2023, the fiscal deficit was projected to have reached 5% of GDP, indicating revenue underperformance and budget under-execution (IMF). In spending, the 2023 budget prioritized responding to the cost-of-living crisis, ensuring energy security, and addressing low civil service capacity. Two supplementary budgets were adopted, in May and October, to allocate additional grants and reallocate resources from under-executing programs. Meanwhile, the debt-to-GDP ratio increased to 35.1% in 2023 (from 32.6% one year earlier) and is expected to follow an upward trend in 2024, reaching 38.4% in 2024, before it edges down to 37.4% in 2025, according to the IMF. Headline inflation decreased to 6.3% in October, down from its peak of 34.6% in October 2022. This decline was driven by lower food and fuel prices, attributed to the recovery in agricultural production following the 2022 drought, as well as a determined monetary policy response. Additionally, core inflation also saw a decline in recent months. Over the longer term, Moldova's economy still faces 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. Nevertheless, Moldova became an EU candidate country in 2022, and in November 2023, the EU Commission recommended that the European Council opens accession negotiations.

Despite experiencing robust growth over the past two decades, which has led to improvements in living standards and a reduction in poverty, Moldova still ranks among the poorest countries in Europe. Unemployment declined to 3.8% in 2023Q2, after reaching 5.5% in 2023Q1. However, it remains well above end-2021 levels (IMF). In 2022, the GDP per capita was estimated at USD 15,719 by the World Bank, 71.2% 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 , Latest available data

Note: (e) Estimated Data

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 8.3% of the GDP and employs nearly 55% 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 23.6% in 2023, as crop production experienced an annual growth of 35.1%, whereas the output of animal products slightly decreased by 1.9%.

The secondary sector represents 19.4% of the GDP, employing 13% 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 contracted by 3.6% y/y in 2023, after a 5% decline in 2022. The activity in the core manufacturing sector contracted by 5.3%.

The GDP structure is progressively turning towards services, to the detriment of heavy industry and agriculture. The tertiary sector now represents 58.4% of the GDP, employing nearly one-third of the workforce (32%). 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, Moldova's retail sales index (excluding car sales) surged by 9.3% year-on-year in Q3 2023, rebounding from a loss of momentum to 2.3% year-on-year in Q2. Concerning the tourism sector, the country welcomed almost 391k tourists in 2023, for a total of 1.41 million overnight stays.

 
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.

 

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Monetary Indicators 20162017201820192020
Moldovan Leu (MDL) - Average Annual Exchange Rate For 1 MUR 0.560.540.500.500.44

Source: World Bank - Latest available data.

 
 

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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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Foreign Trade in Figures

International trade represents around 111% of Moldova's GDP (World Bank, latest data available). The country is a member of the World Trade Organization (WTO) and has signed 43 free trade agreements, including those with the EU, Turkey, the UK, and the Commonwealth of Independent States. According to data by the National Bureau of Statistics, in 2022 the country’s main exports were food and live animals (21.3%), machinery and transport equipment (15.9%), mineral fuels and lubricants (13.6%), and petroleum products (12.9%); whereas imports were led by mineral fuels and lubricants (28%), machinery and transport equipment (22%), petroleum products (16.7%), manufactured goods (14.1%), and chemical products (11.7%).

Traditionally, exports were directed mainly to Russia, but since 2009 more than half of Moldova’s exports have been destined for EU markets. In 2022, the country’s main trading partners were Romania (28.6%), Ukraine (16.6%), Italy (7.6%), Turkey (7%), and Germany (5.3%); whereas imports came chiefly from Romania (17.9%), Russia (12.4%), China (10.3%), Ukraine (9.3%), and Turkey (7.2% - data National Bureau of Statistics). New figures show that, in 2023, the European Union absorbed 65.4% of Moldova's exports, representing a 6.8 percentage point increase compared to 2022. Moreover, the EU comprised 48.3% of the country's imports, marking a 1% rise year-on-year.

Moldova’s trade balance is structurally in deficit. According to data by WTO, in 2022 the country exported USD 4.3 billion worth of goods against USD 9.2 billion in imports (+37.8% and +28.45% y-o-y, respectively). Concerning services, exports (at USD 2.2 billion) were higher than imports (USD 1.3 billion). Data from the World Bank shows that the country’s trade balance on goods and services was negative by 28.3% of GDP in 2022 (from 27.2% one year earlier). Preliminary figures from the National Bureau of Statistics point out that, in 2023, Moldova exported USD 4 billion worth of goods (-6.5% year-on-year), importing USD 8.6 billion (-5.9% y-o-y).

 
Foreign Trade Indicators 20182019202020212022
Imports of Goods (million USD) 5,7605,8435,4167,1779,219
Exports of Goods (million USD) 2,7062,7792,4673,1444,335
Imports of Services (million USD) 1,1211,1788801,1621,371
Exports of Services (million USD) 1,4771,5441,2781,6352,275
Imports of Goods and Services (Annual % Change) 8.46.2-9.521.215.8
Exports of Goods and Services (Annual % Change) 4.18.2-14.917.524.9
Imports of Goods and Services (in % of GDP) 56.856.451.457.870.0
Exports of Goods and Services (in % of GDP) 30.731.227.930.640.9
Trade Balance (million USD) -3,294-3,312-3,094-4,190-4,984
Trade Balance (Including Service) (million USD) -2,938-2,946-2,696-3,718-4,080
Foreign Trade (in % of GDP) 87.487.679.388.5110.9

Source: WTO – World Trade Organisation ; World Bank , Latest Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2022
Romania 28.6%
Ukraine 16.6%
Italy 7.6%
Türkiye 7.0%
Germany 5.3%
See More Countries 34.7%
Main Suppliers
(% of Imports)
2022
Romania 17.9%
Russia 12.4%
China 10.3%
Ukraine 9.3%
Türkiye 7.2%
See More Countries 43.0%

Source: Comtrade, Latest Available Data

 
 

Main Products

4.3 bn USD of products exported in 2022
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 12.9%
Insulated "incl. enamelled or anodised" wire,...Insulated "incl. enamelled or anodised" wire, cable "incl. coaxial cable" and other insulated electric conductors, whether or not fitted with connectors; optical fibre cables, made up of individually sheathed fibres, whether or not assembled with electric conductors or fitted with connectors 11.0%
Sunflower-seed, safflower or cotton-seed oil and...Sunflower-seed, safflower or cotton-seed oil and fractions thereof, whether or not refined, but not chemically modified 8.5%
Maize or cornMaize or corn 7.8%
Sunflower seeds, whether or not brokenSunflower seeds, whether or not broken 7.8%
See More Products 52.0%
9.2 bn USD of products imported in 2022
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 16.3%
Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons 9.2%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 3.6%
Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses "incl. those in the form of transdermal administration" or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006) 2.6%
Insulated "incl. enamelled or anodised" wire,...Insulated "incl. enamelled or anodised" wire, cable "incl. coaxial cable" and other insulated electric conductors, whether or not fitted with connectors; optical fibre cables, made up of individually sheathed fibres, whether or not assembled with electric conductors or fitted with connectors 2.3%
See More Products 66.0%

Source: Comtrade, Latest Available Data

 
 

To go further, check out our service Import Export Flows.

 
 

Main Services

2.0 bn USD of services exported in 2022
36.71%
23.85%
23.61%
9.28%
2.37%
2.32%
0.84%
0.50%
0.23%
0.14%
0.14%
1.4 bn USD of services imported in 2022
39.98%
31.82%
10.55%
4.96%
3.30%
3.11%
2.41%
1.21%
1.14%
1.14%
0.38%

Source: United Nations Statistics Division, Latest Available Data

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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
Search Engines
Moldova.org
Economic Portals
Government of Republic of Moldova
The World Bank in Moldova

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Political Outline

Current Political Leaders
President: President Maia SANDU (since 24 December 2020)
Prime Minister: Dorin RECEAN (since 16 February 2023)
Next Election Dates
Presidential: fall 2024
Legislative: July 2025
Main Political Parties
Moldova has a multi-party system with relatively equally distributed seats. The country's major parties who are represented in the parliament are:

- Action and Solidarity Party (PAS): social liberalism, pro-Europeanism
- Electoral Bloc of Communists and Socialists (Bloc): its members are the Party of Communists of the Republic of Moldova (PCRM) and the Party of Socialists of the Republic of Moldova (PSRM)
- Sor Party (Chance. Duties. Realization.): populist, Eurosceptic
- Revival Party: pro-Russian, left-wing
- National Alternative Movement: centre, pro-Europeanism.
Type of State
Republic state based on parliamentary democracy.
Executive Power
The President is the Head of State and is elected via direct elections for a four-year mandate (renewable once). After the year 2000 and prior to a decision of the Constitutional Court in March 2016, the President was elected by the parliament. The President is a dominant figure on the political scene and has considerable decision-making power. The Prime Minister is designated by the President but has to be confirmed through a vote of confidence by parliament (generally, the head of the majority party or coalition is the one chosen). The Prime Minister also serves a four-year term. He or she is the Head of the Government and has executive powers, which include the implementation of the law and the running of the country's day-to-day affairs. The Cabinet is chosen by the Prime Minister, subject to the approval of parliament, and nominated by the President.
Legislative Power
The legislature in Moldova is unicameral. The Parliament consists of 101 seats; its members serve four-year terms (51 members are elected directly in single-seat constituencies through a simple majority vote, while 50 members are directly elected in a single nationwide constituency through closed party-list proportional representation voting). In Moldova, Parliament is supreme and can dismiss the government, if it so wishes.
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
89/180
Evolution:
91/180
 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Partly Free
Political Freedom:
3/7
Civil Liberties:
34/60

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House

 

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COVID-19 Country Response

Travel restrictions
Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.
Import & export restrictions
A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
For the general overview of the key economic policy responses to the COVID-19 pandemic (fiscal, monetary and macroeconomic) undertaken by the government of Moldavia, please consult the country's dedicated section in the IMF’s Policy Tracker platform.
Support plan for businesses
For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.

 

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Latest Update: April 2024