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
- Moldova private sector diagnostic
- The EBRD's latest Moldova Strategy
- The EBRD in Moldova: Results snapshot
EBRD forecast for Moldova’s Real GDP Growth in 2022 -1.0%
EBRD forecast for Moldova’s Real GDP Growth in 2023 0.0%
The war on Ukraine and subsequent rise of energy prices brought economic growth to a halt during the first half of 2022. Increased government spending and net export growth could not compensate for the stagnation of private consumption and contraction of investments. Inflation reached 34.3 per cent in August 2022 due to rising energy and food prices, seriously reducing households’ real incomes. The authorities have ramped up social welfare schemes to cushion the impact of rising inflation on households, through energy price subsidies and loans to farmers. However, expanded social spending, including as a response to the major inflow of Ukrainian refugees, has widened the budget deficit to an estimated 7.2 per cent of GDP in 2022, according to the IMF. Therefore, public debt is expected to increase by 6 percentage points in 2022 and reach 38.4 per cent of GDP. Increased external financing needs were initially covered by a depletion of foreign reserves, but the agreed augmentation of the IMF Programme in May 2022 helped to mobilise additional funds from the EU and the World Bank and reversed that trend. The economy is likely to decline by 1.0 per cent in 2022 and stagnate with zero per cent growth in 2023. The forecast is sensitive to the duration and intensity of the war in Moldova’s neighbourhood as well as to the availability of gas supplies.