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flag Moldova Moldova: Economic and Political Outline

Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline

Economic Indicators

From 1993, successive government administrations have attempted to bring reforms to Moldova's economy, with a certain amount of success. With the help of the funds from the IMF, the World Bank, as well as the EBRD, Moldova has been able to finance its reforms, specially in the banking and finance sectors. The economic growth of Moldava has been for a long time stimulated by consumption, real estate construction and capital transfers from Moldovan workers living abroad. Nevertheless, the country suffers from a lack of investments and an increase of the inflation rate. Two factors have contributed to increase the general price level: on one side, the rise of the energy bills, mainly caused by the increase in the price of gas imported from Russia, and on the other side, the Russian embargo on wine and Moldovan food products between 2006 and 2009. 

The global economic crisis affected Moldova even though its banking sector, which is hardly adapted to loans and is not yet too open to the market economy, was less affected. The country was touched in three ways: the drop in transfers of funds from migrant workers living abroad (which accounts for almost 30% of the GDP), the drop in foreign investments and the drop in trade, due to the worsening of the situation of its trading partners. This resulted in a deep recession (GDP falling by 6.5% in 2009). Still, the growth forecasts for 2010 were exceeded (6.9%) and the country returned to its pre-crisis levels of production.  The balance of payments have begun to adjust. However, despite the current IMF program, which was started in January 2010, funding needs remain significant.

Growth reached 7% in 2011 and the IMF estimates it could reach 4.5% in 2012. Moldova has resumed growth after a period of political turmoil that led to the fall of the communist government in 2009. However, it remains the poorest country in Europe since about a quarter of the population lived below the poverty line in 2011.

 
Main Indicators 2009201020112012 (e)2013 (e)
GDP (billions USD) 5.445.81e7.20e8.108.82
GDP (Constant Prices, Annual % Change) -6.06.97.0e4.54.5
GDP per Capita (USD) 1,5241,6302,022e2,2772,480
General Government Gross Debt (in % of GDP) 29.126.623.6e21.720.7
Inflation Rate (%) 0.07.4e7.9e7.85.3
Unemployment Rate (% of the Labor Force) 6.47.47.37.06.5
Current Account (billions USD) -0.47-0.48-0.71-0.83-0.86
Current Account (in % of GDP) -8.5-8.3-9.9e-9.7-

Source: IMF - World Economic Outlook Database ; World Bank , Last Available Data

Note: (e) Estimated Data

Main Sectors of Industry

The agricultural sector represents approximately 10% of the GDP and employs 32% of the active population. Moldova main products are fruits and vegetables, tobacco and wine.

The secondary sector represents 10% of the GDP and employs almost 18% of the population. The national industry has to face a double challenge: the loss of its heavy industry since the self-proclaimed independence of Transnistria (a pro-Russian region), and its economic dependent position resulting from a lack of energy resources in its territory.

The GDP structure is progressively turning towards services, to the detriment of heavy industry and agriculture. The services sector represents almost 80% of the GDP and employs half of the active population. It is sustained by insurances, legal consultancy and telecommunications.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 31.1 19.7 49.2
Value Added (in % of GDP) 9.7 12.5 77.9
Value Added (Annual % Change) 0.0 -0.0 3.6

Source: World Bank - Last Available Data.

 

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Monetary Indicators 20062007200820092010
Moldovan Leu (MDL) - Average Annual Exchange Rate For 1 USD 13.1312.1410.3911.1112.37

Source: World Bank - Last Available Data.

 

Find out all the exchange rates daily on our service Currency converter.

 
Learn more about Market Analyses about Moldova on Globaltrade.net, the Directory for International Trade Service Providers.
 

Indicator of Economic Freedom

Score:
55.7/100
Position:
Mostly unfree
World Rank:
115/179
Regional Rank:
39/42

Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation

Note: The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

 

Country Risk

See the Country Risk Analysis Provided By Ducroire.

 

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Foreign Trade in Figures

Since 2009, half of the Moldovan exports, which traditionally targeted the market of the Russian Federation, have begin to aim for the EU. The government's priority is the conclusion of negotiations started in 2010 for an Association Agreement with the EU. This agreement has two major components: a comprehensive free trade agreement between Moldova and the EU and the liberalization of visas for Moldovan nationals, and it should become the driver of foreign trade. In the meantime, the EU and Moldova have signed a strategic agreement on customs cooperation. This initiative is aimed at a better customs cooperation and should promote trade relations between the two entities.

The major areas of export are food products, alcoholic and non-alcoholic beverages, tobacco, textile and textile products and lastly, vegetable products. Moldova's main clients are Russia (more than 20% of exports), Romania (more than 18%), Italy, Ukraine, Belarus, Germany, Poland, Turkey, the United Kingdom and Kazakhstan. The European Union receives 52.3% of Moldovan exports.

Moldova's main imports are mineral products, appliances and equipment, electro-technical material, chemical products, semi-precious metals and by-products, textiles and textile products, foodstuffs, plastic materials and rubber.

Moldova's main suppliers are Ukraine (14% of imports), Russia (11%), Romania (almost 10%), Germany, Italy, China, Turkey, Belarus and Poland. More than 43% of importas come from the EU.

 
Foreign Trade Indicators 20072008200920102011
Imports of Goods (million USD) 3,6904,8993,2783,8555,192
Exports of Goods (million USD) 1,3421,5911,2881,5822,222
Imports of Services (million USD) 613793678729862
Exports of Services (million USD) 606817647663860
Imports of Goods and Services (Annual % Change) 14.6-3.8-19.45.1-
Exports of Goods and Services (Annual % Change) 15.1-11.1-7.812.8-
Imports of Goods and Services (in % of GDP) 97.193.672.982.2-
Exports of Goods and Services (in % of GDP) 47.540.836.641.5-
Trade Balance (million USD) -2,298-3,223-1,949-2,220-
Trade Balance (Including Service) (million USD) -2,309-3,208---
Foreign Trade (in % of GDP) 144.6134.4109.5123.8-

Source: WTO - World Trade Organization ; World Bank , Last Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2010
Russia 26.2%
Romania 16.0%
Italy 9.6%
Ukraine 5.9%
United Kingdom 5.3%
See More Countries 37.0%
Main Suppliers
(% of Imports)
2010
Russia 15.2%
Ukraine 13.7%
Romania 10.0%
China 8.3%
Germany 7.6%
See More Countries 45.1%

Source: Comtrade, Last Available Data

 

Main Products

Main Exports
(% of Exports)
2010
Wine of fresh grapes, incl. fortified wines; grape...Wine of fresh grapes, incl. fortified wines; grape must, partly fermented and of an actual alcoholic strength of > 0,5% vol or grape must with added alcohol of an actual alcoholic strength of > 0,5% vol 8.9%
Insulated "incl. enamelled or anodised" wire,...Insulated "incl. enamelled or anodised" wire, cable "incl. coaxial cable" and other insulated electric conductors, whether or not fitted with connectors; optical fibre cables, made-up of individually sheathed fibres, whether or not assembled with electric conductors or fitted with connectors 5.9%
Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses "incl. those in the form of transdermal administration" or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006) 3.9%
Other nuts, fresh or dried, whether or not shelled...Other nuts, fresh or dried, whether or not shelled or peeled (excl. coconuts, brazil nuts and cashew nuts) 3.9%
Sunflower seeds, whether or not brokenSunflower seeds, whether or not broken 3.7%
See More Products 73.7%
Main Imports
(% of Imports)
2010
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 10.8%
Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons 8.8%
Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses "incl. those in the form of transdermal administration" or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006) 4.3%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 2.3%
Cigars, cheroots, cigarillos and cigarettes of...Cigars, cheroots, cigarillos and cigarettes of tobacco or of tobacco substitutes 1.8%
See More Products 72.0%

Source: Comtrade, Last Available Data

 
 

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Sources of General Economic Information

Ministries
Ministry of Economy of the Republic of Moldova
Statistical Office
National Bureau of Statistics of the Republic of Moldova
Central Bank
National Bank of Moldova
Stock Exchange
Moldova Stock Exchange
Search Engines
Moldova.com
Moldova Cyber Community
Dmoz.org
Economic Portals

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Political Outline

Executive Power
The President is the head of state and is elected by parliament for a term of four years. The President is a dominant figure on the political scene and has considerable decision making power. The Prime Minister is designated by the President but has to be confirmed through a vote of confidence by parliament (generally the head of the majority party or coalition is the one chosen). He has a  four-year mandate. The Prime Minister is the head of the government and has executive powers which include implementation of the law and the running the of the country's day-to-day affairs. The Cabinet is chosen by the Prime Minister but is subject to the approval of parliament.
Legislative Power
The legislature in Moldova is unicameral. Parliament consists of 101 seats; its members elected to serve four year terms as per a system of proportional representation. In Moldova, Parliament is supreme and can dismiss the government, if it so wishes. The people of Moldova have limited political rights.
Main Political Parties
Moldova has a multi-party system. The country's major parties are as follows:
- PCRM (Communist Party of the Republic of Moldova) – a communist party close to Russia,
- PPCD (Christian Democratic People’s Party) – supports unification with Romania,
- Democratic Party of Moldova – a social democratic party,
- PSL (Social Liberal Party) – a liberal political party.
Current Political Leaders
President: Nicolae Timofti since 16 March 2012 - Independant
Prime Minister :Vladimir FILAT since 25 September 2009 - Liberal Democratic Party
Next Election Dates
Presidential: March 2016
 

Indicator of Freedom of the Press

World Rank:
53/179
Evolution:
22 places up compared to 2010

Source: Worldwide Press Freedom Index 2011, Reporters Without Borders

Note: The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position is assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

 

Indicator of Political Freedom

Ranking:
Partly Free
Political Freedom:
3/7
Civil Liberties:
4/7

Map of freedom 2010
Source: Freedom House

Note: The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

 

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