The economic context of Moldova

Economic Indicators

Moldova’s economy is showing signs of recovery, despite ongoing unprecedented challenges from the spillover effects of Russia's invasion of Ukraine. The country faces structural challenges such as low productivity growth, governance issues, a large state presence, limited competition, an imbalanced business environment, and tax distortions. After growing by 0.7% in 2023, Moldova's GDP increased by 0.1% year-on-year to MDL 324 billion (EUR 16.7 billion) in 2024, following negative growth rates in the second half of the year due to the weak performance of the agriculture sector, according to the statistics bureau. The Economy Ministry estimates that Moldova's GDP will grow by 1% in 2025, according to the baseline forecast, as the plan is implemented and EU investments are absorbed.

Regarding public finances, Moldova's general government deficit narrowed to 3.9% of GDP in 2024, driven by strong revenue growth and lower-than-budgeted spending, particularly in capital expenditure (Fitch Ratings). The Moldovan Parliament adopted amendments to the 2025 state budget law, raising revenues by MDL 3.73 billion (5.2%) to MDL 75.285 billion and expenditures by MDL 7.743 billion (9.1%) to MDL 93.191 billion. As a result, the budget deficit will rise by 28.9% to MDL 17.906 billion, or 5.1% of GDP. General government debt was estimated at 38.5% of GDP at the end-2024 and is projected to approach 43% by 2026. Around 63% of the debt is denominated in foreign currency, primarily owed to official creditors on concessional terms. Moldova has no external commercial debt, and interest costs remain low at 1.4% of GDP or 4.1% of government revenues (Fitch Ratings). Meanwhile, average inflation stood at 4.7% in 2024 (from 13.4% one year earlier), but accelerated to 9% y/y in January 2025, driven by adjustments to gas, electricity, and heating tariffs, along with higher prices for certain food products. Although EU funding to subsidise energy bills and weak domestic demand may help moderate the impact of rising electricity prices, Fitch projects annual inflation to average 9.5% in 2025. Moldova became an EU candidate country in 2022, and in November 2023, the EU Commission recommended that the European Council open accession negotiations. On 20 October 2024, Moldova held a constitutional referendum alongside the first round of the presidential election, approving an amendment to include the country’s EU membership aspiration in the Constitution.

Despite two decades of sustained economic growth, poverty persists, especially in rural areas with limited access to services and economic opportunities. Traditional poverty alleviation methods, like remittances and social assistance, are slowing, and low labour force participation and employment rates hinder employment-based poverty reduction, highlighting the need for structural reforms. While the unemployment rate was estimated at 4% in 2024 by the National Bureau of Statistics, nearly a quarter of young people aged 15-34 were neither employed nor in education and training (NEET). In 2024, the GDP per capita was estimated at USD 18,524 by the IMF, around 70% lower than the European Union’s average.

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 7.6% of GDP and employs nearly 51% 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 14.6% in 2024, as crop production experienced an annual growth of 22.9%, whereas the output of animal products increased by 5.7%.
 
The secondary sector represents 17.4% of the GDP, employing 13.3% of the active population. Traditionally, the country’s main industries have been agriculture and food processing, textile, apparel, and footwear. The manufacturing industry alone is estimated to contribute 8% 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, adjusted for calendar and seasonal effects, industrial production fell by 0.8% in 2024 compared to 2023, due to a 3.8% drop in manufacturing, despite increases of 11.3% in extractive industries and 11.1% in electricity, gas, heat, and air conditioning supply.
 
The GDP structure is progressively turning towards services, to the detriment of heavy industry and agriculture. The tertiary sector now represents 61.1% of the GDP, employing more than one-third of the workforce (35.5%), driven by the insurance, legal consultancy, and telecommunications sectors. The ICT sector is also growing (7.1% of GDP in value-added terms in 2024, +5.5% y-o-y). 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. By the end of 2023, 11 licensed banks operated in Moldova, with total assets reaching MDL 153 940.5 million, up 17.2% (MDL 22 572.3 million) from the previous year. Loans and advances at amortised cost made up the largest share at 40.6% (MDL 62 487.1 million), down 4.1 pp from end-2022 (Central Bank data). 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 country welcomed almost 474k tourists in 2024 (+21.1% y-o-y).

 

Breakdown of Economic Activity By Sector	Agriculture	Industry	Services
Employment By Sector (in % of Total Employment)	51.1	13.3	35.5
Value Added (in % of GDP)	7.6	17.4	61.1
Value Added (Annual % Change)	29.2	-11.7	2.2

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

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

 

 

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