Moldova: Economic and Political Overview
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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 | 2019 | 2020 | 2021 (e) | 2022 (e) | 2023 (e) |
| GDP (billions USD) | 11.97e | 11.91e | 12.40 | 13.32 | 14.30 |
| GDP (Constant Prices, Annual % Change) | 3.7e | -7.0 | 4.5 | 5.2 | 5.5 |
| GDP per Capita (USD) | 4,464 | 4,523 | 4,792 | 5,240 | 5,729 |
| General Government Gross Debt (in % of GDP) | 28.3 | 34.8 | 38.1 | 39.5 | 41.6 |
| Inflation Rate (%) | 4.3 | 4.4 | 5.1 | 21.9 | 6.5 |
| Unemployment Rate (% of the Labour Force) | 5.1 | 8.0 | 5.5 | 3.0 | 3.0 |
| Current Account (billions USD) | -1.12 | -0.80 | -1.05 | -1.28 | -1.28 |
| Current Account (in % of GDP) | -9.3 | -6.7 | -8.5 | -9.6 | -9.0 |
Source: IMF – World Economic Outlook Database, October 2021
Note: (e) Estimated Data
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. Because of rounding, the sum of the percentages may be smaller/greater than 100%.
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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.}}
Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation
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Latest Update: July 2022
