World Bank cuts Moldova's 2024 GDP growth f'cast to 2.2%

The World Bank revised its estimate for Moldova's GDP growth in 2023 to 0.7%, slashing 1.1 pp off its January assessment, the global lender said in its Spring 2024 Europe and Central Asia Economic Update report. The country's 2022 GDP growth rate was also revised to negative 4.6%, from negative 5% in the January report.

Moldova's economy, public finances, and household incomes are being strained by the spillover effects of Russia's invasion of Ukraine, which resulted in an energy and refugee crisis, as per the report. While moderate economic recovery is expected in 2024, the country is still threatened by heavy macroeconomic risks, such as the potential intensification of the war in Ukraine, additional energy disruptions, and headwinds from the upcoming elections in 2024 and 2025. Moldova prepares for presidential elections scheduled to take place in autumn as well as parliamentary elections, to be held next year.

The World Bank said that Moldova should address the poverty that is pervasive in the country, especially in rural regions, through structural reforms, as employment-focused poverty reduction is impeded by low labor force participation and low employment rates. The bank also urged the country to continue its progress towards EU accession. Last month, president Maia Sandu said Moldova will hold this autumn a referendum on accession to the European Union.

Moldova's economic growth is seen to accelerate to 3.9% in 2025, the World Bank said, shedding 0.2 pp from its January projection. GDP growth is then projected to speed up to 4.5% in 2026.

(1 euro=19.1608 Moldovan lei)