The European Commission has raised its GDP growth forecast for Moldova in 2025 from 0.9% to 1.6%, in 2026 from 2.8% to 2.6%, and expects economic growth of 3.7% in 2027
The European Commission’s Autumn 2025 Economic Forecast features such data. It notes that economic activity in Moldova picked up in the first half of 2025, backed by strong growth in private investment, while energy compensation payments, which began in the first quarter of 2025, helped mitigate the impact of rising energy prices on private consumption. Net exports are expected to continue to weigh on GDP, but growth is projected to reach 1.6% in 2025 and strengthen to 3.7% in 2027, supported by sustained growth in private consumption and spending under the Reform and Growth Facility. The government budget deficit is projected to remain broadly stable in 2025 before increasing to almost 5% of GDP due to the implementation of the Reform Program and investments supported by the Fund. The debt-to-GDP ratio is expected to increase over the forecast horizon. European Commission experts believe that economic activity in our country should recover thanks to domestic demand. After stagnating in 2024, mainly due to a significant decline in agricultural production, real GDP increased by 1.1% year-on-year in the second quarter of 2025. This recovery was mainly driven by sustained domestic demand, supported by real wage growth, while large-scale support in the energy sector helped mitigate the negative impact of winter energy price increases on household incomes and business operating costs. At the same time, strong private investment growth was supported by policy measures such as a zero tax rate on reinvested profits of small and medium-sized enterprises and more favorable financing conditions. Net exports continued to weigh on growth, mainly due to a decline in agricultural exports, largely related to the drought in 2024, and a sharp increase in electricity imports. Real GDP growth is projected to reach 1.6% in 2025 and then gain further momentum over the forecast period as agriculture recovers and consumption and investment are stimulated under the Reform and Growth Facility. With the economy recovering, the labor market will resume positive momentum, and real wage growth will continue to support private consumption. Private investment will remain the main driver of overall investment growth in 2025, while public investment is expected to accelerate until 2027, supported by the Reform and Growth Facility. Net exports are expected to continue to hold back growth, although their negative contribution is expected to weaken. Agricultural exports will recover thanks to favorable weather conditions in the second half of 2025, while import growth will slow. However, this recovery will be partially offset by the continued decline in oil and gas re-exports until 2026 and a sharp drop in vegetable oil exports, partly due to new import licensing requirements. European Commission experts point out that the current account deficit increased significantly in 2025, reflecting a further deterioration in the trade balance. However, exports of services, particularly in the ICT sector, should partially offset the trade deficit in goods. Import growth is expected to slow as domestic renewable energy production increases, while investment growth should support import demand. In the first half of 2025, remittances from abroad continued to decline, mainly due to a decrease in remittances from Russia, while remittances from EU countries continued to grow and are expected to remain at a high level. Foreign direct investment inflows in the first half of 2025 showed positive dynamics, mainly due to reinvested profits, and are expected to strengthen as EU integration progresses. At the same time, the consequences of the war in Ukraine will continue to have a negative impact on investor confidence. In the short term, downside risks remain high, particularly due to renewed inflationary pressures, climate change risks, limited capacity to implement planned investments, and geopolitical uncertainty. EC experts note that annual inflation in Moldova peaked at 9.1% in January 2025 due to a sharp rise in electricity prices after Russian gas supplies to the Transnistria region were cut off. Lower energy and food prices, supported by improved domestic agricultural production in the summer, contributed to a decline in inflation to 6.9% in September. Inflation is expected to fall below 6% by the end of this year, returning to the central bank's target range of 5% ± 1.5 percentage points, supported by further declines in food and regulated prices. Inflationary pressures are expected to increase moderately until 2027, reflecting stronger domestic demand. The budget deficit has remained broadly stable but is expected to increase. In the first eight months of 2025, revenues exceeded initial expectations, driven by higher inflation and improved revenue collection. At the same time, expenditures were under-executed, particularly capital expenditures. The government budget deficit is expected to reach 3.8% of GDP in 2025, which is comparable to the 2024 level. Although the 2026 budget has not yet been presented, the budget deficit-to-GDP ratio is expected to increase and approach 5% of GDP by the end of the forecast period, mainly due to increased current expenditures related to the implementation of reforms and investments financed under the Reform and Growth Facility. The gradual phasing out of the zero tax rate on reinvested profits of SMEs is expected to have a positive impact on revenues from 2027 onwards. Public debt is expected to increase moderately from 38.2% of GDP in 2024 to 41.1% of GDP in 2027, supported by a favorable interest rate and growth differential. It should be noted that in its previous Spring 2025 Economic Forecast, the European Commission lowered its GDP growth forecast for Moldova in 2025 from 3.8% to 0.9% and in 2026 from 4.2% to 2.8%. As previously reported by the National Bureau of Statistics, Moldova's GDP in the first half of 2025 amounted to 155 billion 293 million lei, unchanged in real terms compared to the same period in 2024. At the same time, in the second quarter of 2025, compared to the same period last year, the country's GDP amounted to 82 billion 313 million lei and increased by 1.1% compared to the same period in 2024, as well as grew by 1.6% compared to the first quarter of 2025. The Ministry of Economic Development and Digitalization previously lowered its GDP growth forecast for Moldova in 2025 from 2% to 1.3%. The World Bank raised its forecast for Moldova's GDP growth in 2025 from 0.9% to 1.5% and in 2026 from 2.4% to 2.7%. At the same time, it lowered its economic growth forecast for Moldova in 2027 from 4.4% to 3.8%. The EBRD lowered its GDP growth forecast for Moldova in 2025 from 1.8% to 1.5%, but kept its economic growth forecast for the country in 2026 at 3.8%. The IMF raised its forecast for Moldova's GDP growth in 2025 by 1.1 percentage points, from 0.6% to 1.7%. At the same time, IMF experts lowered their forecast for Moldova's economic growth in 2026 by 0.3 percentage points, from 2.5% to 2.2%, and at the end of the next five-year period (2030), they forecast GDP growth of 3.5% for our country, instead of the previous forecast of 5%. // 19.11.2025 — InfoMarket.
