GDP, current US$ billion
GDP per capita, current US$
Life Expectancy at birth, years (2017)
Moldova is a small lower-middle-income economy. Although the poorest country in Europe, it has made significant progress in reducing poverty and promoting inclusive growth since the early 2000s. The economy has expanded by an average of 5% annually, driven by consumption and fueled by remittances. The latter account for a quarter of GDP, among the highest shares in the world.
European integration has anchored the Government’s policy reform agenda but reforms that are good on paper have yet to materialize. A vulnerable political system, polarized society, adverse external environment, and skills mismatch in the labor market, as well as climate-related shocks, are Moldova’s biggest economic challenges.
Transparency, accountability, and corruption are crucial concerns. Business confidence is low and the macroeconomic framework remains vulnerable. External budget support, based on an agreement with the International Monetary Fund, has a high level of conditionality. Continuous economic stabilization, the advancement of key economic reforms, and the creation of a rule-based environment for businesses are Moldova’s key goals.
With parliamentary elections due at the end of 2018, ambitious reforms in vital areas are highly likely to stumble. Moldova also faces another important challenge. Large-scale emigration, combined with decreasing fertility rates, has led to an alarming decline in the population and hastened the pace of aging in Moldova, putting pressure on the pension system and limiting the country’s long-term competitiveness.
Last Updated: Apr 17, 2018