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Overview

The economy of Moldova is an emerging upper-middle income economy, with a high Human Development Index. Since the country gained independence from the Soviet Union in 1992, it has steadily transitioned to a market economy. According to the World Bank, despite a strong economic performance over the past two decades, Moldova remains among the poorest nations in Europe. Growth has remained relatively high since the 1990s, with low levels of unemployment and falling levels of poverty, but a combination of demographic factors, especially an ageing population and significant levels of emigration, and recent regional events, especially Russia's invasion of Ukraine, have posed serious economic challenges to the Moldovan economy, particularly due to inflation and rising energy prices. Productivity growth has remained poor, and a significant proportion of the population are reliant on government pensions and social assistance. Due to Moldova's historic reliance upon Russian oil and natural gas, the energy sector has posed a particular challenge to the country's economy.

GDP per capita has almost doubled from $2,749 (USD) in 2015 to $5,562 in 2022. Following the COVID-19 pandemic and subsequent lockdowns, annual GDP growth rebounded to 13.9% in 2021, before Russia's invasion of Ukraine, energy and refugee crises caused growth to collapse to −5.9%. As of 2022, unemployment remains low at 2.3%, but inflation had dramatically increased to 28.7% due to the energy crisis caused by the invasion. In recent years the country has received significant economic assistance from the European Union, IMF, and World Bank, particularly after Russia's invasion of Ukraine. The IMF predicts that in 2023 the economy will improve from a 1.5% contraction to a growth of 1.5%.

Moldova remains highly vulnerable to fluctuations in remittances from workers abroad (which constitute 25 percent of GDP), exports to the Commonwealth of Independent States (CIS) and European Union (EU) (88 per cent of total exports), and donor support (about 10 per cent of government spending). The main transmission channels through which adverse exogenous shocks could impact the Moldovan economy are remittances (also due to potentially returning migrants), external trade, and capital flows.

The economy's primary exports are agriculture, apparel, and sports equipments. In 2021, Moldova exported $140 million in wine and is the 21st largest exporter of wine in the world, with wine exports being the country's fifth largest export. With its 300 days of sunshine per year, the climate in Moldova is ideal for agriculture and particularly vineyards. The wine industry is a major economic sector, representing three percent of Moldova's GDP and eight percent of the country's total exports, according to government data. In 2021, the EU became the main purchaser of Moldovan wines. Information and Communication Technology (ICT) is one of the most promising economic sectors in Moldova, accounting for more than 10 percent of GDP. More than 2,000 students graduate with a degree in computing or a related field per year. IT companies export about 80 percent of their total production to the United States, the United Kingdom, France, Germany, the Netherlands, and Romania.