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

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 repeatedly hindered by the unfavourable global situation or by poor climatic conditions. After Moldova's economy collapsed due to the COVID-19 outbreak, GDP growth came back to its pre-pandemic level at 4.5% in 2021. The latest forecasts made by the IMF state that GDP will grow by 5.2% in 2022 and by 5.5% in 2023, although uncertainties around the evolution of the pandemic may keep the economy below potential. However, European aid will provide considerable support to the public finances with a EUR 600 million EU stimulus package between 2021 and 2024.

Public debt has risen to 38.1% of GDP in 2021 and is expected to increase in 2022 (39.5%) and in 2023 (41.6%) as the public spending increased to mitigate COVID-19 impact. As a result, the country's current account has reached a negative rate of 8.5% in 2021. The IMF forecasts an increasing current account deficit of 9.6% for 2022 and 9% in 2023. Inflation reached 3% in 2021 but is expected to rise to 5.8% in 2022, before decreasing to around 5% in 2023, according to the IMF's latest World Economic Outlook. 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.

Moldova's unemployment decreased consistently in 2021, to 5.5%. The IMF estimates that the rate will be stable at around 3% in 2022 and 2023. The jobless rate is higher in urban areas than in rural areas. However, Moldova remains the poorest country in Europe and has one of the lowest productivity levels.

 
Main Indicators 20202021 (e)2022 (e)2023 (e)2024 (e)
GDP (billions USD) 11.5313.6714.0514.3315.02
GDP (Constant Prices, Annual % Change) -8.313.90.02.35.8
GDP per Capita (USD) 45556
General Government Gross Debt (in % of GDP) 36.633.136.038.341.7
Inflation Rate (%) 3.85.128.513.85.0
Unemployment Rate (% of the Labour Force) 3.83.53.53.53.5
Current Account (billions USD) -0.89-1.59-1.80-1.78-1.71
Current Account (in % of GDP) -7.7-11.6-12.8-12.4-11.4

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 2 years, the agriculture sector is key to Moldova's economy: it still represents 9.5% of the GDP (-26.4% year on year evolution) 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 of the Republic of Moldava). Moldova's main products are vegetables, fruits, grapes, grain, sugar beets, sunflower seeds, tobacco, beef, milk and wine.

The secondary sector represents 23.3% of GDP, employing 21.7% 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 10.5% of the country’s GDP. The National Bureau of Statistics states that Moldova's industrial production rose by 12.3% year-on-year in 2021, after falling 5.5% year-on-year in 2020 following the outbreak of the COVID-19 pandemic.

The GDP structure is progressively turning towards services, to the detriment of heavy industry and agriculture. The tertiary sector now represents 54.2 of the GDP, employing more than half of the workforce (57.3%). It is driven by the insurance, legal consultancy and telecommunications sectors. The ICT sector is also growing.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 21.0 21.7 57.3
Value Added (in % of GDP) 9.5 23.3 54.2
Value Added (Annual % Change) -26.4 -1.2 -5.7

Source: World Bank - Latest available data.

 

Find more information about your business sector on our service Market Reports.

 
 
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.

 
 

Find out all the exchange rates daily on our service Currency Converter.

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.

 

Return to top

Foreign Trade in Figures

International Trade represents over 77% of Moldova's GDP (World Bank, latest data available). The country mainly exports insulated electric conductors, sunflower seeds, wine of fresh grapes and seats and parts thereof; while imports are driven by petroleum oils, medicaments and motor cars.

Traditionally, exports were directed mainly to Russia, but since 2009 more than half of Moldova’s exports have been destined for EU markets (also thanks to a strategic agreement on customs co-operation signed with the EU, which aims to increase cooperation and promote trade with the two entities). In 2020, the country’s main trading partners were Romania (28.6%), Germany (9.1%) and Russia (8.8%); whereas imports came chiefly from China (11.9%), Romania (11.7%), and Russia(11.1%). The European Union received 68.8% of total Moldova’s exports and was the origin of 49.5% of its imports. Exports of goods to the countries of the European Union (EU-27) totalled USD 1.9 billion in 2021 (17% more compared to 2020), accounting for 61.% of total exports.

Overall, Moldova's trade deficit widened by 36.7% on the year in 2021, to USD 4.032 billion according to the country's statistics bureau. Moldova's exports were 24.5% higher on the year, while imports rose by 32.2% during 2021.

 
Foreign Trade Indicators 20162017201820192020
Imports of Goods (million USD) 4,0204,8315,7605,8435,416
Exports of Goods (million USD) 2,0452,4252,7062,7792,485
Imports of Services (million USD) 8359011,0891,161859
Exports of Services (million USD) 1,0471,2141,4421,5121,250
Imports of Goods and Services (Annual % Change) 2.811.09.76.7-8.9
Exports of Goods and Services (Annual % Change) 9.810.97.27.3-15.5
Imports of Goods and Services (in % of GDP) 55.354.555.756.049.7
Exports of Goods and Services (in % of GDP) 32.331.130.131.427.3
Trade Balance (million USD) -2,079-2,559-3,294-3,312-3,076
Trade Balance (Including Service) (million USD) -1,852-2,254-2,939-2,961-2,687
Foreign Trade (in % of GDP) 87.685.685.987.477.0

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

 

Main Partner Countries

Main Customers
(% of Exports)
2021
Romania 26.5%
Türkiye 10.0%
Russia 8.8%
Germany 7.8%
Italy 7.6%
See More Countries 39.3%
Main Suppliers
(% of Imports)
2021
Russia 14.7%
China 11.7%
Romania 11.6%
Ukraine 9.3%
Germany 7.6%
See More Countries 45.2%

Source: Comtrade, Latest Available Data

 
 

Main Products

3.1 bn USD of products exported in 2021
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 14.7%
Wheat and meslinWheat and meslin 6.6%
Sunflower seeds, whether or not brokenSunflower seeds, whether or not broken 6.3%
Wine of fresh grapes, incl. fortified wines; grape...Wine of fresh grapes, incl. fortified wines; grape must, partly fermented and of an actual alcoholic strength of > 0,5% vol or grape must with added alcohol of an actual alcoholic strength of > 0,5% vol 4.5%
Maize or cornMaize or corn 4.0%
See More Products 63.9%
7.2 bn USD of products imported in 2021
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 8.3%
Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons 4.2%
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) 3.9%
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%
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 2.4%
See More Products 77.6%

Source: Comtrade, Latest Available Data

 
 

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

 
 

Main Services

1.2 bn USD of services exported in 2018
34.55%
31.32%
13.65%
10.00%
5.84%
3.04%
0.44%
0.44%
0.43%
0.26%
0.01%
1.1 bn USD of services imported in 2018
36.00%
32.16%
14.12%
5.10%
3.49%
2.61%
2.41%
1.43%
0.91%
0.89%
0.88%

Source: United Nations Statistics Division, Latest Available Data

Return to top

Political Outline

Current Political Leaders
President: President Maia SANDU (since 24 December 2020)
Prime Minister: Natalia GAVRILITA (since 6 August 2021)
Next Election Dates
Presidential: 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: populist, Eurosceptic

Other parties include: Electoral Bloc "Renato Usatîi", Dignity and Truth Platform Party, Democratic Party of Moldova, Democracy at Home Party, We Build Europe At Home Party.

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 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 elected to serve four-year terms as per a system of proportional representation. In Moldova, Parliament is supreme and can dismiss the government, if it so wishes. The people of Moldova have limited political rights.
 

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

 

Return to top

COVID-19 Country Response

COVID-19 epidemic evolution

To find out about the latest status of the COVID-19 pandemic evolution and the most up-to-date statistics on the COVID-19 disease in Moldova, please consult the epidemiological situation reports on the website of the National Agency for Public Health.
For the international outlook you can consult the latest
situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country.

Sanitary measures

To find out about the latest public health situation in Moldova and the current sanitary measures in vigour, please consult the website of the Ministry of Health, Labour, and Social Protection (in Moldovan), including the up-to-date information on the containment measures put in place and public health recommendations. Further updates can be found on the website of the government of Moldova.

Travel restrictions

The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.

The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.

Import & export restrictions

For the information on all the measures applicable to movement of goods during the period of sanitary emergency due to the COVID-19 outbreak (including eventual restrictions on imports and exports, if applicable), please consult the portal of the Moldovan Customs Authority (in Moldovan). The country adopted an export ban on protective equipment such as masks, gloves and disinfectants.
For a general overview of trade restrictions due to COVID-19 pandemic, please consult the section dedicated to Moldova on the
International Trade Centre's COVID-19 Temporary Trade Measures webpage.

Economic recovery plan

To know about the economic measures taken by the national authorities to address the impact of the COVID-19 pandemic on the national economy, please visit the website of the government of Moldova. The website of the National Bank of Moldova (NBM) provides further info on the monetary measures taken by the institution to support the economy. The IMF approved a USD 235 million disbursement in emergency assistance to Moldova to address the COVID-19 pandemic.
For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) taken by the Moldovan government to limit the socio-economic impact of the COVID-19 pandemic, please consult the section dedicated to Moldova in the
IMF’s Policy Tracker platform.

Support plan for businesses

For the information on the local business support scheme and taxation measures established by the Moldovan government to help businesses to deal with the economic impacts of the COVID-19 epidemic on their activity, please consult the website of the government of Moldova. Further info can be retrieved on the website of KPMG.
For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the World Bank's Map of SME-Support Measures in Response to COVID-19.

Support plan for exporters

At the moment the official government sources do not provide any information on the specific programs for Moldovan exporting companies put in place by the national government following the COVID-19 epidemic outbreak.

 

Any Comment About This Content? Report It to Us.

 

© Export Entreprises SA, All Rights Reserved.
Latest Update: November 2022