Moldova is going through a difficult economic period characterized by a rare and dangerous phenomenon – stagflation, which has been affecting the country for five years now - Veaceslav Ionita
In the weekly program “Economic Analysis with Veaceslav Ionita,” the economic policy expert at IDIS Viitorul noted that stagflation is a combination of high inflation and economic stagnation—two phenomena that normally should not occur simultaneously. “When prices rise, the economy should grow, and when they fall, production should decline. In Moldova, however, prices are rising without economic growth, which has a negative impact on both the population and the business environment,” explained Vaeceslav Ionita. The expert also noted that in the second and third quarters of 2024, Moldova recorded a decline in GDP, confirming a new recession. Although there was a slight increase in the fourth quarter, it was not enough to reverse the negative trend. “Over the past 5-6 years, Moldova has experienced three economic recessions - in 2020, 2022, and 2024. Even if the last one was less pronounced, all three indicate a phenomenon of deep stagnation,” the expert emphasized. The economist claims that inflation has accelerated significantly since 2021 and could reach 7% by the end of 2025, with prices doubling over the past five years. “In essence, we had an 80% increase in prices with virtually zero economic growth. Industry and agriculture have not been able to recover to 2019 levels,” noted Veaceslav Ionita. According to data presented by the economist, industrial production in 2024 was below 2019 levels, and 5% growth in 2025 would only mean a return to the level of six years ago. The situation is even more difficult in agriculture, where, after the poor harvest of 2024, only in 2025 could there be a 15% increase, which is only enough to match the production volume of 2019. The economic analyst also noted that Moldova's exports fell from $4.3 billion in 2022 to approximately $3.5 billion in 2025, returning to the 2021 level. At the same time, the number of employed people has decreased significantly, from 872,000 in 2019 to 807,000 in 2025. The expert also noted that after three consecutive years (2021–2023) of real wage declines, real purchasing power growth was only recorded in 2024. “Although nominal wages increased, they were unable to offset inflation. In 2025, real wages are estimated to grow by 6-7%, but this is still not enough to cover previous losses,” explained Veaceslav Ionita. The economist notes that another sign of stagnation is the decline in domestic consumption. VAT revenues, which reflect economic activity, stagnated in 2023-2024, remaining at around 30 billion lei. Only in 2025 was there a slight recovery, reaching 36.6 billion lei - a level comparable to 2019, if we take into account the real value of the leu (MDL). “We had unprecedented inflation, GDP stagnation, a decline in production and exports, job losses and a reduction in consumption. All this clearly defines the phenomenon of stagflation - an unfavorable economic context for both the population and the business environment,” the expert added. Veaceslav Ionita also drew attention to an alarming phenomenon: for the first time in Moldova's history, food imports exceeded exports. “Price increases have played into the hands of importers, while domestic production has stagnated,” the economist emphasized. According to the economic analyst, in a normal economy, business lending should be positive. However, in Moldova in recent years, the business environment has favored savings over investment, which is another sign of stagnation. “Only in the second quarter of 2025 did net lending become positive, but in the third quarter the trend changed again, indicating that confidence in the economy remains low,” added Veaceslav Ionita. The economic expert warns that Moldova is in a critical period characterized by stagflation—a combination of high inflation and economic stagnation—which slows the country's development and affects the standard of living of the population. // 14.11.2025 – InfoMarket.
