Country Profile Moldova
President: Igor Dodon
Capital (and Largest City): Chișinău
Population (2017): 3,550,900
Total Area: 33,846 km²
Official Language: Romanian
Recognized Regional Languages: Gagauz, Russian, Ukrainian
Currency: Moldovan leu (MDL)
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. The Association Agreement and a Deep and Comprehensive Free Trade Agreement between Moldova and the European Union (EU) were signed in June 2014. A vulnerable political system, polarized society, adverse external environment, and climate-related shocks are Moldova’s biggest economic challenges.
ETransparency, accountability, and corruption are crucial concerns. With higher public debt and damaged business confidence, the macroeconomic framework has been severely damaged, while external budget support only resumed late in 2016, after an agreement with the International Monetary Fund (IMF) had been reached. Macroeconomic and fiscal stabilization is also an important short-term challenge.
EWith parliamentary elections due in 2018, the Government has a short window of opportunity to implement ambitious proposals in public administration and investment climate reform.
EMoldova faces other important challenges. Large-scale emigration, combined with decreasing fertility rates, has reduced the population by 2% per year and hastened the pace of aging in Moldova, putting pressure on the pension system.