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 0.0%
EBRD forecast for Moldova’s Real GDP Growth in 2024 3.5%
The economy continued to struggle in the first half of 2023 after a steep decline in economic activity in 2022. GDP decreased by 2.4 per cent year on year in the first quarter of 2023 mostly due to the continued drop in private consumption. Industrial production fell by 7.6 per cent year on year in the first half of 2023 and agricultural production declined by 1.0 per cent, both on top of deep contractions in 2022. On the other hand, annual inflation came down sharply, to 9.7 per cent in August 2023 on the back of stabilised global energy prices, allowing the National Bank of Moldova to implement a series of cuts to the policy rate, from 21.5 per cent in November 2022 to 6.0 per cent in June 2023. Significant official sector external financing in 2023 has supported the domestic currency, boosted foreign reserves and eased the pressure on the overstretched government budget. The government has raised public sector wages and pensions and expanded social support to the most vulnerable. Together with falling inflation, this led to real income growth turning positive in the second quarter of 2023, paving the way for a rebound of the economy in the second half of 2023. Therefore, GDP is expected to remain flat in 2023 and grow by 3.5 per cent in 2024, supported by policy reforms in the context of EU accession and continued robust external financing.