GDP, current US$ billion
GDP per capita, current US$
Life Expectancy at birth, years (2019)
Moldova is a small lower-middle-income economy. Although it is among the poorest countries in Europe, it has made significant progress in reducing poverty and promoting inclusive growth since the early 2000s. Poverty in Moldova dropped from 28 percent in 2010 to 13 percent by 2018. The reduction in poverty, however, stalled in 2019 and has potentially reversed in 2020 following the COVID-19 pandemic.
The economy has expanded by an average of 4.6 percent annually in the past 20 years, driven by consumption and fueled by remittances. The latter account for 10 percent of GDP.
A closer integration with Europe has anchored successive governments’ policy reform agendas, but reforms that are good on paper face implementation challenges. A vulnerable political system, a polarized society, low productivity, demographic challenges, skills mismatches, and a high vulnerability to both climate-related and external shocks are Moldova’s biggest economic challenges.
Moldova’s large-scale out-migration, combined with decreasing fertility rates, has led to a sharp decline in population and increased the share of elderly people. This puts pressure on the pension system and limits the available labor force and the country’s long-term competitiveness.
Resilient recovery post COVID-10 crises aiming at continuing economic stabilization, improving living standards, and creating a rule-based business environment are the country’s key goals.
In the near term, in spite of political instability, the caretaker Government has the task of taking the country through the COVID-19 crisis without reversing hard-won structural reforms, while regaining trust among citizens and international partners, combating corruption, advancing the unfinished reform agenda, and ensuring a fair and smooth transition through possibly early parliamentary elections in 2021.
Last Updated: Apr 06, 2021