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Moldova Investment Climate


Moldova
Although Moldova's 2006 economic performance is not as impressive as recent years due to shocks from Russian trade bans and gas price hikes, the country continues to make progress toward developing a viable free-market economy. The government has liberalized most prices and has phased out subsidies on most basic consumer goods. High levels of worker remittances and fast regional growth were the main drivers of economic growth. In accordance with a 2005 Action Plan with the European Union, Moldova has begun to harmonize its laws with those of the EU. The progress achieved to date, coupled with societal consensus on European integration present a unique chance for Moldova to ultimately fulfill its European aspirations.

Macroeconomic Performance

  • Real GDP grew by 43% between 2000-2005.
  • Absolute poverty declined from 71% in 1999 to 29% in 2006.
  • Industrial output is $1.69 billion, down 6.9% from 2005.
  • The average monthly salary rose by 29%.
  • Moldova ranked 81st among 157 countries in economic freedom as evaluated by the Heritage Foundation and Wall Street Journal.
  • Moldovan Government earned $12.8 million in 2006 from privatization.
  • Successful rescheduling of foreign debt through the Paris Club and conclusion of all bilateral agreements.

European Integration Remains a Focus

  • Moldova signed the Central European Free Trade Agreement (CEFTA), which replaces the patchwork of 32 bilateral and free trade agreements among the South Eastern European countries.
  • Moldova became eligible for Millennium Challenge Corporation (MCC) program.
  • MCC approved a $24.7 million agreement for assistance with anti-corruption strategy under MCC's Threshold Program. European Union and the World Bank provided $1.2 billion for implementation of the EU-Moldova European Action Plan and the Moldova Economic Growth and Poverty Reduction Strategy Program.
  • IMF approved $167 million for realization of the three-year Poverty Reduction and Growth Facility.

Investment Climate

  • Since independence, $1.2 billion in FDI has been invested in Moldova.
  • Banking, energy, transportation, retail, communications are among industry sectors attracting the highest foreign investments.
  • Societe Generale de France Group became owner of 70.57% stake in commercial bank Mobiasbanka by paying $24 million. It is the largest transaction in the history of the Moldovan Stock Exchange.

Indicators 2001 2002 2003 2004 2005 2006
Real GDP Growth, % 6.1 7.2 6.3 7.3 7.1 7.5
Average Inflation, % 9.6 5.2 15.7 12.5 10.0 14.1
Exchange Rate, USD 13.0 13.6 13.9 12.3 12.9 12.8
Current Account Balance, % of GDP -4.6 -3.1 -7.3 -5.5 -7.5 -5.4
Foreign Debt Stock (USD billions) 0.99 1.231 1.441 1.39 1.4 1.6
FDI (USD billions, net) 147 117 48 88 260 200

Sources: The World Bank, Economist Intelligence Unit (EIU)
Moldova Investment Climate, 2005


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* This material does not constitute an offer to sell or a solicitation of an offer to buy an interest in the fund. This material is not, and under no circumstances is it to be construed as, a prospectus or advertisement.