In Moldova we focus on:
- Creating the conditions to support private sector development: The EBRD is supporting measures to improve the business environment, both through investment projects which help attract foreign direct investors, as well as through engaging with the Moldovan authorities to promote much-needed reforms. The EBRD is supporting the Economic Council, an advisory body to the Prime Minister, which brings together policy-makers and the business community with a view to enhancing the business climate. Improving the business climate is crucial for the Bank’s ability to further support the private sector and attract investment. Governance and transparency in the banking sector are particular concerns and the EBRD is working closely with the authorities to address them.
- Promoting European standards and regional integration: The EBRD is investing in projects which help Moldova develop value-added exports – especially in manufacturing and agribusiness sectors – which will be competitive in regional markets. As Moldova and the EU are moving forward towards a Deep and Comprehensive Free Trade Area (DCFTA), Moldovan companies need to adopt higher production and quality standards than those currently applied. In addition, the EBRD is financing improvements in the country’s infrastructure to develop links to neighbouring countries as well as internal transport infrastructure needed to bring domestic producers closer to their markets. The Bank is contributing to strengthening energy security and efficiency, and is helping develop the telecommunications sector.
- Enhancing commercialisation and sustainability of municipal enterprises: The EBRD is continuing to finance regional and municipal water supply companies and is looking into ways to modernize district heating and solid waste management and promote public-private partnerships (PPPs) in the sector.
As well as being a country where the EBRD works, Moldova is also an EBRD donor. In 2014 Moldova signed a €1 million contribution agreement to the Eastern Europe Energy Efficiency and Environment Partnership (E5P) Fund.
The EBRD’s latest Moldova strategy was adopted on 23 February 2023
EBRD forecast for Moldova’s Real GDP Growth in 2023 -1.3%
EBRD forecast for Moldova’s Real GDP Growth in 2024 3.5%
Spillovers from the war on Ukraine and energy- supply shocks caused the economy to contract by 5.9 per cent in 2022. The same factors are continuing to affect the economy in 2023, though some improvement is likely in the second half of the year. Risks arising from the proximity to the war zone continue weighing on investment activity, which compounds the effect of a sharp drop in real incomes. On the positive side, inflation has been falling rapidly on the back of monetary tightening and weak domestic demand. External financing provided by the official sector closed the external and fiscal financing gaps in 2022, supported the exchange rate and helped to replenish foreign reserves. Such support is likely to continue in 2023, combined with the augmented IMF programme, contributing to macroeconomic stability. However, GDP is likely to decline by a further 1.3 per cent in 2023, before growth returns in 2024 (projected at 3.5 per cent). In the short term, there are significant downside risks arising from the war in the neighbourhood and energy vulnerability. In the medium and long term, prospects of EU accession can be a powerful catalyst for structural reforms and stronger economic growth.