Economy
Since the
collapse of the Soviet Union, the
relative weight of the
service sector in the economy of Moldova started
to grow and began to dominate the GDP (now about 75%), as a result of decrease
in
industry and
agriculture. The main economic indicators
contracted dramatically.
As of 2009
[update],
Moldova has been described by the
European Parliament as the poorest country
in Europe in terms of
GDP.
Energy
Moldova imports all of its supplies of
petroleum,
coal,
and
natural gas, largely
from Russia. Moldova is a partner country of the EU
INOGATE energy programme, which has four key topics:
enhancing
energy
security,
convergence of member state
energy markets on the basis
of
EU internal energy market principles,
supporting
sustainable energy development, and
attracting investment for energy projects of common and regional interest
Economic Reforms;
After the breakup of the Soviet Union in 1991, energy shortages contributed to
sharp production declines. As part of an ambitious economic liberalization
effort, Moldova introduced a
convertible currency, liberalized all
prices, stopped issuing preferential credits to state enterprises, backed steady
land
privatization,
removed export controls, and liberalized interest rates. The government entered
into agreements with the
World
Bank and the
International Monetary Fund to
promote growth.
Recent trends indicate that the Communist government intends to reverse some
of these policies, and recollectivise land while placing more restrictions on
private business. The economy returned to positive growth, of 2.1% in 2000 and
6.1% in 2001. Growth remained strong in 2007 (6%), in part because of the
reforms and because of starting from a small base. The economy remains
vulnerable to higher fuel prices, poor agricultural weather, and the skepticism
of foreign investors.
Following the
regional financial crisis in
1998, Moldova has made significant progress towards achieving and retaining
macroeconomic and financial stabilization. It has, furthermore, implemented many
structural and institutional reforms that are indispensable for the efficient
functioning of a market economy. These efforts have helped maintain
macroeconomic and financial stability under difficult external circumstances,
enabled the resumption of economic growth and contributed to establishing an
environment conducive to the economy's further growth and development in the
medium term.
Despite these efforts and recent resumption of economic growth, Moldova ranks
low in terms of commonly used living standards and human development indicators
in comparison with other transition economies. Although the economy experienced
a constant economic growth after 2000: with 2.1%, 6.1%, 7.8% and 6.3% between
2000 and 2003 (with a forecast of 8% in 2004), one can observe that these latest
developments hardly reach the level of 1994, with almost 40% of the
GDP
registered in 1990. Thus, during the last decade little has been done to reduce
the country's vulnerability. After a severe economic decline, social and
economic challenges, energy uprooted dependencies, Moldova continues to occupy
one of the last places among European countries in income per capita.
In 2005 (according to the
Human Development Report), the
registered GDP per capita was US $ 2,100
PPP, which was 4.5 times lower than the
world average at the time (US $ 9,543). Moreover, GDP per capita was under the
average of its statistical region (US $ 9,527 PPP). In 2005, about 20.8% of the
population were under the absolute poverty line and registered an income lower
than US $ 2.15 (PPP) per day. Moldova is classified as medium in human
development and is at the 111th spot in the list of 177 countries. The value of
the
Human Development Index (0.708) is
below the world average. Moldova remains the poorest country in Europe in terms
of official (i.e., excluding the black and grey economy) per capita which
currently stands at $1,808.729
The GDP in 2007 constituted $4.104 billion.That
constituted a growth of 3% from 2006
