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 4.0%
EBRD forecast for Moldova’s Real GDP Growth in 2019 4.0%
The economy of Moldova is generating steady growth. Real GDP is estimated to have grown by 4.5 per cent in 2017 and by the same rate year-on-year in the first half of 2018. Economic growth was supported by favourable external economic conditions and capital investment which returned to growth after contributing negatively to GDP growth in 2015-16. In the same period, rising remittances and real wages bolstered household consumption which, in turn, increased by 3.8 per cent in real terms. A widening of the current account deficit in the first half of 2018 reflected consumption- and investment-driven import growth. However, it was more than offset by foreign exchange capital inflows. Against the backdrop of a small appreciation of Moldovan leu, inflation slowed from an average of 6.6 per cent in 2017 to 3.7 per cent year-on-year in the first nine months of 2018. Official reserve assets increased from US$ 2.8 billion in December 2017 to US$ 3.0 billion in August 2018, providing approximately six months of import coverage. Significant progress has been achieved in restoring shareholder transparency at the two systemically-important banks, following the entry of international investors into the ownership structure of these banks. However, structural and demographic challenges remain. We forecast Moldova’s real GDP to grow by 4.0 per cent in 2018 and by 4.0 per cent in 2019. The existing IMF programme is an important anchor of reforms and macroeconomic stability, and its implementation needs to continue without delays.