Key developments and challenges

The financial crisis highlighted Moldova’s economic dependence on consumption partly financed by remittances. The challenge for the authorities is to encourage greater export orientation through reforms to improve the institutional environment, including reducing corruption and the arbitrary interference of the state in the economy, and through measures to increase investment in infrastructure.

The regulatory framework for the financial sector should be further improved. Measures are needed to strengthen banks’ governance as well as to prevent the build-up of macroeconomic vulnerabilities, including from foreign currency lending to un-hedged borrowers.

Fiscal policies should be put onto a sustainable path, while protecting necessary social and capital expenditures. A consolidation of the public education sector, civil service reform and a greater share of domestic funding in raising public debt could all contribute to this aim.