The absolute poverty rate in Moldova increased to 31% in 2022 against the background of shocks related to the energy crisis and inflation, as well as the war in Ukraine.
Such data is contained in the government's first report on Moldova's progress in implementing the 2030 Agenda for Sustainable Development. Its conclusions will be used in the work of the UN Summit on Sustainable Development Goals, which takes place on September 18-20 in New York. According to the report, Moldova's progress in eradicating extreme poverty is gradual, but there are still steps to be taken in the fight against absolute poverty. The data presented in the document show an improvement in extreme poverty with a slight decrease in the percentage of the population living on less than $2.15 per day - from 2.5% in 2018 to 1% in 2021, with the percentage increasing to 1.3% in 2022. At the same time, the percentage of the population that lives on less than $4.3 per day decreased from 4.8% in 2018 to 4.6% in 2021, but increased to 6.1% in 2022.The absolute poverty rate of the population increased from 23% in 2018 to 31.1% in 2022, despite government efforts to support the population through the expansion of social assistance programs and the provision of compensation for energy costs. It is worth noting that this is the highest absolute poverty rate in Moldova since 2014, while the lowest was in 2018 (23%). The report notes that a number of challenges impede Moldova's progress in reducing poverty: an underdeveloped economy with modest investment dynamics, limited access to new technologies; low labor productivity; the country's persistent vulnerability to economic crises and climate change (these problems can have devastating effects on the economy, contributing to worsening poverty and increasing inequality among the population); the imbalance of development between the capital city and the rest of the country; one of the lowest levels of poverty in the country; one of the lowest employment rates in Central-Eastern Europe; a large share of the informal economy (about 1/4) and the corresponding tax losses it generates; insufficient capacity of the social protection system to address poverty; inadequate redistribution of income between the rich and the poor. The government report presents the measures taken to reduce poverty: improving the social protection system, increasing the minimum wage in the country, supporting the population in the cold season, increasing the share of pensioners who receive a pension (up to 94.6% of the total number of people of retirement age), improving social protection of families with children, people with disabilities, ensuring equality of rights and opportunities for all citizens, etc. At the same time, it is noted that despite progress in overcoming poverty, it remains a big challenge and will require sustained attention to achieve the target set for 2030: to reduce absolute poverty to 10% of the total population of the country. And, while some progress has been made in terms of reducing extreme poverty, any economic or social crisis could bring the population back below the poverty line. Due to high inflationary pressures caused by the war in Ukraine, real household income fell by 5.9% in 2022, further emphasizing this vulnerability. On average, 20% of household income is generated by social support, 12% by remittances and 60% by wages. Increasing the share of income from wages, as well as strengthening the middle class, could help reduce vulnerability to external shocks. At the same time, it is important to continue investing in social protection programs as well as in stable and inclusive economic growth. Overall, according to the report, of the 17 Sustainable Development Goals, Moldova has made the most progress on gender equality and quality of education, while the least progress was made in "Conservation of Terrestrial Ecosystems" and "Peace, Justice, Effective Institutions". The report was compiled with the support of development partners and the UN agency in Moldova. // 18.09.2023 - InfoMarket.
