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. Moldova contributed € 325,000 to the Eastern Europe Energy Efficiency and Environment Partnership (E5P) Fund in 2015. The EBRD project for Balti District Heating will receive funding from the E5P.
The EBRD’s latest Moldova strategy was adopted on 29 November 2017
EBRD forecast for Moldova’s Real GDP Growth in 2018 3.5%
EBRD forecast for Moldova’s Real GDP Growth in 2019 4.0%
Moldova’s economy has benefited from a period of relative calm after the banking crisis and recession in 2014-15. Real output growth of 4.5 per cent in 2017 was supported by benign external economic conditions, good agricultural outturns and a strengthening of domestic demand. Money transfers from abroad increased by 11.2 per cent in 2017 following a sizable contraction in the previous two years. The Moldovan lei appreciated by approximately 16.8 per cent against the US dollar in 2017 and upward currency pressures persisted in the first four months of 2018. The current account deficit widened from approximately 4.2 per cent of GDP in 2016 to approximately 7.6 per cent of GDP in 2017. International reserve assets increased from US$ 2.2 billion in January 2017 to US$ 2.9 billion in March 2018, offering six months of import coverage. A major breakthrough was achieved in the beginning of 2018 in restoring transparent ownership at one of the largest commercial banks but significant vulnerabilities in the financial sector remain. In March 2018, IMF reached staff-level agreement with the authorities concerning the third programme review, indicating that the country’s cooperation with the IMF remains broadly on track. We forecast Moldova’s economy to grow by 3.5 per cent in 2018 and by 4 per cent in 2019.