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Moldova: Economic and Political Outline
Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline
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 | 2009 | 2010 | 2011 | 2012 (e) | 2013 (e) |
| GDP (billions USD) | 5.44 | 5.81e | 7.20e | 8.10 | 8.82 |
| GDP (Constant Prices, Annual % Change) | -6.0 | 6.9 | 7.0e | 4.5 | 4.5 |
| GDP per Capita (USD) | 1,524 | 1,630 | 2,022e | 2,277 | 2,480 |
| General Government Gross Debt (in % of GDP) | 29.1 | 26.6 | 23.6e | 21.7 | 20.7 |
| Inflation Rate (%) | 0.0 | 7.4e | 7.9e | 7.8 | 5.3 |
| Unemployment Rate (% of the Labor Force) | 6.4 | 7.4 | 7.3 | 7.0 | 6.5 |
| 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
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 | 2006 | 2007 | 2008 | 2009 | 2010 |
| Moldovan Leu (MDL) - Average Annual Exchange Rate For 1 USD | 13.13 | 12.14 | 10.39 | 11.11 | 12.37 |
Source: World Bank - Last Available Data.
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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.
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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 | 2007 | 2008 | 2009 | 2010 | 2011 |
| Imports of Goods (million USD) | 3,690 | 4,899 | 3,278 | 3,855 | 5,192 |
| Exports of Goods (million USD) | 1,342 | 1,591 | 1,288 | 1,582 | 2,222 |
| Imports of Services (million USD) | 613 | 793 | 678 | 729 | 862 |
| Exports of Services (million USD) | 606 | 817 | 647 | 663 | 860 |
| Imports of Goods and Services (Annual % Change) | 14.6 | -3.8 | -19.4 | 5.1 | - |
| Exports of Goods and Services (Annual % Change) | 15.1 | -11.1 | -7.8 | 12.8 | - |
| Imports of Goods and Services (in % of GDP) | 97.1 | 93.6 | 72.9 | 82.2 | - |
| Exports of Goods and Services (in % of GDP) | 47.5 | 40.8 | 36.6 | 41.5 | - |
| 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) | 144.6 | 134.4 | 109.5 | 123.8 | - |
Source: WTO - World Trade Organization ; World Bank , Last Available Data
| 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
Source: Comtrade, Last Available Data
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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.).
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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Last Updates: May 2012