Moldova vs. Romania


Economy - overview

Despite recent progress, Moldova remains one of the poorest countries in Europe. With a moderate climate and productive farmland, Moldova's economy relies heavily on its agriculture sector, featuring fruits, vegetables, wine, wheat, and tobacco. Moldova also depends on annual remittances of about $1.2 billion - almost 15% of GDP - from the roughly one million Moldovans working in Europe, Israel, Russia, and elsewhere.

With few natural energy resources, Moldova imports almost all of its energy supplies from Russia and Ukraine. Moldova's dependence on Russian energy is underscored by a more than $6 billion debt to Russian natural gas supplier Gazprom, largely the result of unreimbursed natural gas consumption in the breakaway region of Transnistria. Moldova and Romania inaugurated the Ungheni-Iasi natural gas interconnector project in August 2014. The 43-kilometer pipeline between Moldova and Romania, allows for both the import and export of natural gas. Several technical and regulatory delays kept gas from flowing into Moldova until March 2015. Romanian gas exports to Moldova are largely symbolic. In 2018, Moldova awarded a tender to Romanian Transgaz to construct a pipeline connecting Ungheni to Chisinau, bringing the gas to Moldovan population centers. Moldova also seeks to connect with the European power grid by 2022.

The government's stated goal of EU integration has resulted in some market-oriented progress. Moldova experienced better than expected economic growth in 2017, largely driven by increased consumption, increased revenue from agricultural exports, and improved tax collection. During fall 2014, Moldova signed an Association Agreement and a Deep and Comprehensive Free Trade Agreement with the EU (AA/DCFTA), connecting Moldovan products to the world's largest market. The EU AA/DCFTA has contributed to significant growth in Moldova's exports to the EU. In 2017, the EU purchased over 65% of Moldova's exports, a major change from 20 years previously when the Commonwealth of Independent States (CIS) received over 69% of Moldova's exports. A $1 billion asset-stripping heist of Moldovan banks in late 2014 delivered a significant shock to the economy in 2015; the subsequent bank bailout increased inflationary pressures and contributed to the depreciation of the leu and a minor recession. Moldova's growth has also been hampered by endemic corruption, which limits business growth and deters foreign investment, and Russian restrictions on imports of Moldova's agricultural products. The government's push to restore stability and implement meaningful reform led to the approval in 2016 of a $179 million three-year IMF program focused on improving the banking and fiscal environments, along with additional assistance programs from the EU, World Bank, and Romania. Moldova received two IMF tranches in 2017, totaling over $42.5 million.

Over the longer term, Moldova's economy remains vulnerable to corruption, political uncertainty, weak administrative capacity, vested bureaucratic interests, energy import dependence, Russian political and economic pressure, heavy dependence on agricultural exports, and unresolved separatism in Moldova's Transnistria region.

Romania, which joined the EU on 1 January 2007, began the transition from communism in 1989 with a largely obsolete industrial base and a pattern of output unsuited to the country's needs. Romania's macroeconomic gains have only recently started to spur creation of a middle class and to address Romania's widespread poverty. Corruption and red tape continue to permeate the business environment.

In the aftermath of the global financial crisis, Romania signed a $26 billion emergency assistance package from the IMF, the EU, and other international lenders, but GDP contracted until 2011. In March 2011, Romania and the IMF/EU/World Bank signed a 24-month precautionary standby agreement, worth $6.6 billion, to promote fiscal discipline, encourage progress on structural reforms, and strengthen financial sector stability; no funds were drawn. In September 2013, Romanian authorities and the IMF/EU agreed to a follow-on standby agreement, worth $5.4 billion, to continue with reforms. This agreement expired in September 2015, and no funds were drawn. Progress on structural reforms has been uneven, and the economy still is vulnerable to external shocks.

Economic growth rebounded in the 2013-17 period, driven by strong industrial exports, excellent agricultural harvests, and, more recently, expansionary fiscal policies in 2016-2017 that nearly quadrupled Bucharest's annual fiscal deficit, from +0.8% of GDP in 2015 to -3% of GDP in 2016 and an estimated -3.4% in 2017. Industry outperformed other sectors of the economy in 2017. Exports remained an engine of economic growth, led by trade with the EU, which accounts for roughly 70% of Romania trade. Domestic demand was the major driver, due to tax cuts and large wage increases that began last year and are set to continue in 2018.

An aging population, emigration of skilled labor, significant tax evasion, insufficient health care, and an aggressive loosening of the fiscal package compromise Romania's long-term growth and economic stability and are the economy's top vulnerabilities.

GDP (purchasing power parity)$34.68 billion (2019 est.)

$33.482 billion (2018 est.)

$32.101 billion (2017 est.)

note: data are in 2010 dollars
$579.549 billion (2019 est.)

$556.442 billion (2018 est.)

$532.611 billion (2017 est.)

note: data are in 2010 dollars
GDP - real growth rate4.5% (2017 est.)

4.3% (2016 est.)

-0.4% (2015 est.)
4.2% (2019 est.)

4.54% (2018 est.)

7.11% (2017 est.)
GDP - per capita (PPP)$13,050 (2019 est.)

$12,373 (2018 est.)

$11,651 (2017 est.)

note: data are in 2010 dollars
$29,941 (2019 est.)

$28,576 (2018 est.)

$27,192 (2017 est.)

note: data are in 2010 dollars
GDP - composition by sectoragriculture: 17.7% (2017 est.)

industry: 20.3% (2017 est.)

services: 62% (2017 est.)
agriculture: 4.2% (2017 est.)

industry: 33.2% (2017 est.)

services: 62.6% (2017 est.)
Population below poverty line7.3% (2018 est.)23.8% (2018 est.)
Household income or consumption by percentage sharelowest 10%: 4.2%

highest 10%: 22.1% (2014 est.)
lowest 10%: 15.3%

highest 10%: 7.6% (2014 est.)
Inflation rate (consumer prices)4.8% (2019 est.)

3% (2018 est.)

6.5% (2017 est.)
3.8% (2019 est.)

4.6% (2018 est.)

1.3% (2017 est.)
Labor force1.295 million (2017 est.)4.889 million (2020 est.)
Labor force - by occupationagriculture: 32.3%

industry: 12%

services: 55.7% (2017 est.)
agriculture: 28.3%

industry: 28.9%

services: 42.8% (2014)
Unemployment rate4.99% (2019 est.)

3.16% (2018 est.)
3.06% (2019 est.)

3.56% (2018 est.)
Distribution of family income - Gini index25.7 (2018 est.)

26.8 (2014 est.)
36 (2017 est.)

28.2 (2010)
Budgetrevenues: 2.886 billion (2017 est.)

expenditures: 2.947 billion (2017 est.)

note: National Public Budget
revenues: 62.14 billion (2017 est.)

expenditures: 68.13 billion (2017 est.)
Industriessugar processing, vegetable oil, food processing, agricultural machinery; foundry equipment, refrigerators and freezers, washing machines; hosiery, shoes, textileselectric machinery and equipment, auto assembly, textiles and footwear, light machinery, metallurgy, chemicals, food processing, petroleum refining, mining, timber, construction materials
Industrial production growth rate3% (2017 est.)5.5% (2017 est.)
Agriculture - productsmaize, wheat, sunflower seed, grapes, apples, sugar beet, milk, potatoes, barley, plums/sloesmaize, wheat, milk, sunflower seed, potatoes, barley, grapes, sugar beet, rapeseed, plums/sloes
Exports$3.985 billion (2019 est.)

$3.826 billion (2018 est.)

$3.57 billion (2017 est.)
$114.311 billion (2019 est.)

$110.685 billion (2018 est.)

$105.188 billion (2017 est.)
Exports - commoditiesinsulated wiring, sunflower seeds, wine, corn, seats (2019)cars and vehicle parts, insulated wiring, refined petroleum, electrical control boards, seats (2019)
Exports - partnersRomania 27%, Russia 9%, Italy 9%, Germany 9%, Turkey 6%, Poland 5% (2019)Germany 22%, Italy 10%, France 7% (2019)
Imports$7.113 billion (2019 est.)

$6.765 billion (2018 est.)

$6.165 billion (2017 est.)
$136.091 billion (2019 est.)

$127.553 billion (2018 est.)

$117.292 billion (2017 est.)
Imports - commoditiesrefined petroleum, cars, insulated wiring, packaged medicines, broadcasting equipment (2019)cars and vehicle parts, crude petroleum, packaged medicines, insulated wiring, broadcasting equipment (2019)
Imports - partnersRomania 20%, Russia 10%, Ukraine 9%, Germany 8%, China 7%, Turkey 6%, Italy 6% (2019)Germany 19%, Italy 9%, Hungary 7%, Poland 6%, China 5%, France 5% (2019)
Debt - external$7.232 billion (2019 est.)

$7.16 billion (2018 est.)
$117.829 billion (2019 est.)

$115.803 billion (2018 est.)
Exchange ratesMoldovan lei (MDL) per US dollar -

18.49 (2017 est.)

19.924 (2016 est.)

19.924 (2015 est.)

19.83 (2014 est.)

14.036 (2013 est.)
lei (RON) per US dollar -

4.02835 (2020 est.)

4.31655 (2019 est.)

4.0782 (2018 est.)

4.0057 (2014 est.)

3.3492 (2013 est.)
Fiscal yearcalendar yearcalendar year
Public debt31.5% of GDP (2017 est.)

35.8% of GDP (2016 est.)
36.8% of GDP (2017 est.)

38.8% of GDP (2016 est.)

note: defined by the EU's Maastricht Treaty as consolidated general government gross debt at nominal value, outstanding at the end of the year in the following categories of government liabilities: currency and deposits, securities other than shares excluding financial derivatives, and loans; general government sector comprises the subsectors: central government, state government, local government, and social security funds
Reserves of foreign exchange and gold$2.803 billion (31 December 2017 est.)

$2.206 billion (31 December 2016 est.)
$44.43 billion (31 December 2017 est.)

$40 billion (31 December 2016 est.)
Current Account Balance-$602 million (2017 est.)

-$268 million (2016 est.)
-$11.389 billion (2019 est.)

-$10.78 billion (2018 est.)
GDP (official exchange rate)$11.982 billion (2019 est.)$249.543 billion (2019 est.)
Credit ratingsMoody's rating: B3 (2010)Fitch rating: BBB- (2011)

Moody's rating: Baa3 (2006)

Standard & Poors rating: BBB- (2014)
Ease of Doing Business Index scoresOverall score: 74.4 (2020)

Starting a Business score: 95.7 (2020)

Trading score: 92.3 (2020)

Enforcement score: 63.6 (2020)
Overall score: 73.3 (2020)

Starting a Business score: 87.7 (2020)

Trading score: 100 (2020)

Enforcement score: 72.2 (2020)
Taxes and other revenues30.2% (of GDP) (2017 est.)29.3% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)-0.6% (of GDP) (2017 est.)-2.8% (of GDP) (2017 est.)
Unemployment, youth ages 15-24total: 10.4%

male: 11.1%

female: 9.4% (2019 est.)
total: 16.8%

male: 16.3%

female: 17.5% (2019 est.)
GDP - composition, by end usehousehold consumption: 85.8% (2017 est.)

government consumption: 19% (2017 est.)

investment in fixed capital: 21.9% (2017 est.)

investment in inventories: 1.4% (2017 est.)

exports of goods and services: 42.5% (2017 est.)

imports of goods and services: -70.7% (2017 est.)
household consumption: 70% (2017 est.)

government consumption: 7.7% (2017 est.)

investment in fixed capital: 22.6% (2017 est.)

investment in inventories: 1.9% (2017 est.)

exports of goods and services: 41.4% (2017 est.)

imports of goods and services: -43.6% (2017 est.)
Gross national saving16.8% of GDP (2019 est.)

15.1% of GDP (2018 est.)

16.8% of GDP (2017 est.)
18.3% of GDP (2019 est.)

18.1% of GDP (2018 est.)

20.3% of GDP (2017 est.)

Source: CIA Factbook