Moldova Economy Profile 2009

Economy - overview

Moldova remains one of the poorest countries in Europe despite recent progress from its small economic base. It enjoys a favorable climate and good farmland but has no major mineral deposits. As a result, the economy depends heavily on agriculture, featuring fruits, vegetables, wine, and tobacco. Moldova must import almost all of its energy supplies. Moldova's dependence on Russian energy was underscored at the end of 2005, when a Russian-owned electrical station in Moldova's separatist Transnistria region cut off power to Moldova and Russia's Gazprom cut off natural gas in disputes over pricing, and again in January 2009, during a similar dispute. Russia's decision to ban Moldovan wine and agricultural products, coupled with its decision to double the price Moldova paid for Russian natural gas, slowed GDP growth in 2006-07. However, in 2008 growth exceeded the 6% level Moldova had achieved in 2000-05, boosted by Russia's partial removal of the bans, solid fixed capital investment, and strong domestic demand driven by remittances from abroad. Economic reforms have been slow because of corruption and strong political forces backing government controls. Nevertheless, the government's primary goal of EU integration has resulted in some market-oriented progress. The granting of EU trade preferences and increased exports to Russia will encourage higher growth rates, but the agreements are unlikely to serve as a panacea, given the extent to which export success depends on higher quality standards and other factors. The economy remains vulnerable to higher fuel prices, poor agricultural weather, and the skepticism of foreign investors. Also, the presence of an illegal separatist regime in Moldova's Transnistria region continues to be a drag on the Moldovan economy. The deteriorating global economic crisis did not seriously effect the Moldovan economy in 2008 due to its low exposure to the international financial system, but a global economic slowdown, particularly in the EU and Russia, could hurt the economy in 2009 as Moldova relies heavily on remittances from Moldovans abroad.

GDP (purchasing power parity)

$10.67 billion (2008 est.)
$9.951 billion (2007 est.)
$9.661 billion (2006 est.)
note: data are in 2008 US dollars

GDP (official exchange rate)

$6.124 billion (2008 est.)

GDP - real growth rate

7.2% (2008 est.)
3% (2007 est.)
4.8% (2006 est.)

GDP - per capita (PPP)

$2,500 (2008 est.)
$2,300 (2007 est.)
$2,200 (2006 est.)
note: data are in 2008 US dollars

GDP - composition by sector

agriculture: 19.4%
industry: 20%
services: 60.6% (2008 est.)

Population below poverty line

29.5% (2005)

Labor force

1.327 million (2008 est.)

Labor force - by occupation

agriculture: 40.6%
industry: 16%
services: 43.3% (2005)

Unemployment rate

2.1% (2007 est.)

Household income or consumption by percentage share

lowest 10%: 3%
highest 10%: 28.2% (2004)

Distribution of family income - Gini index

33.2 (2003)
40.6 (1997)

Investment (gross fixed)

32.5% of GDP (2008 est.)

Budget

revenues: $2.453 billion
expenditures: $2.513 billion (2008 est.)

Public debt

22.5% of GDP (2008 est.)
63.4% of GDP (2004 est.)

Inflation rate (consumer prices)

12.8% (2008)
12.3% (2007 est.)

Commercial bank prime lending rate

NA% (31 December 2008)
18.83% (31 December 2007)

Stock of money

$1.116 billion (31 December 2008)
$965 million (31 December 2007)

Stock of quasi money

$1.928 billion (31 December 2008)
$1.449 billion (31 December 2007)

Stock of domestic credit

$2.406 billion (31 December 2008)
$1.896 billion (31 December 2007)

Industries

sugar, vegetable oil, food processing, agricultural machinery; foundry equipment, refrigerators and freezers, washing machines; hosiery, shoes, textiles

Industrial production growth rate

-1% (2008 est.)

Electricity - production

3.824 billion kWh (2006 est.)

Electricity - production by source

fossil fuel: 90.6%
hydro: 9.4%
nuclear: 0%
other: 0% (2001)

Electricity - consumption

5.806 billion kWh (2006 est.)

Electricity - exports

229 million kWh (2006 est.)

Electricity - imports

3.741 billion kWh (2006 est.)

Oil - production

0 bbl/day (2007 est.)

Oil - consumption

15,770 bbl/day (2006 est.)

Oil - imports

14,450 bbl/day (2005)

Oil - exports

50.03 bbl/day (2005)

Oil - proved reserves

0 bbl (1 January 2006 est.)

Natural gas - production

50 million cu m (2006 est.)

Natural gas - consumption

2.44 billion cu m (2007 est.)

Natural gas - exports

0 cu m (2007 est.)

Natural gas - imports

2.44 billion cu m (2007 est.)

Natural gas - proved reserves

0 cu m (1 January 2006 est.)

Current Account Balance

-$1.009 billion (2008 est.)
-$695.5 million (2007 est.)

Agriculture - products

vegetables, fruits, wine, grain, sugar beets, sunflower seed, tobacco; beef, milk

Exports

$1.647 billion (2008 est.)
$1.368 billion (2007 est.)

Exports - commodities

foodstuffs, textiles, machinery

Exports - partners

Russia 28.9%, Romania 15.4%, Italy 9.6%, Ukraine 8.4%, Poland 5.5%, Germany 5.1%, Belarus 4% (2008)

Imports

$4.87 billion (2008 est.)
$3.676 billion (2007 est.)

Imports - commodities

mineral products and fuel, machinery and equipment, chemicals, textiles

Imports - partners

Russia 21%, Romania 15.7%, Ukraine 14.5%, Germany 8.7%, Italy 5.5%, Belarus 4.6% (2008)

Reserves of foreign exchange and gold

$1.672 billion (31 December 2008 est.)
$1.334 billion (31 December 2007 est.)

Debt - external

$4.125 billion (31 December 2008)
$3.326 billion (31 December 2007 est.)

Stock of direct foreign investment - at home

$1.813 billion (2008)

Stock of direct foreign investment - abroad

$NA

Market value of publicly traded shares

$NA (31 December 2008)
$573.9 million (2004)

Economic aid - recipient

$191.8 million (2005)

Currency (code)

MDL

Currency (code)

Moldovan leu (MDL)

Exchange rates

Moldovan lei (MDL) per US dollar - 10.326 (2008 est.), 12.177 (2007), 13.131 (2006), 12.6 (2005), 12.33 (2004)

Fiscal year

calendar year