Ahead of the International Monetary Fund mission's visit to Chisinau on October 21–28, the Fund released a new forecast: It has once again downgraded its economic forecast for Moldova: the expected GDP growth for 2027 has been lowered from 3.2% to 2.3%, while the forecast for 2026 remains at 1.5%. At the same time, the economy grew by only 0.6% in the first half of the year. Against the backdrop of high inflation, a widening external deficit, and upcoming tax changes, the question arises: How sustainable is the current economic growth, and could another shock lead to a contraction in GDP?
As recently as late 2025, the IMF expected Moldova's economy to grow by 3.5% in 2027. Over the following ten months, the forecast was revised downward by 1.2 percentage points. After several years of energy crises and weak investment activity, a gradual acceleration of the economy had been anticipated. However, the recovery is even slower than forecast.
According to the National Bureau of Statistics, in the first half of 2026, Moldova's GDP increased by only 0.6% in real terms, totaling 165.78 billion lei. To achieve the projected growth for the full year, economic activity must accelerate significantly in the second half of the year. Otherwise, the annual result may fall short of expectations.
International financial institutions have differing assessments of the country's outlook. The World Bank forecasts GDP growth of 1.9% in 2026 and 3% in 2027, while the European Bank for Reconstruction and Development forecasts 2.8% and 3.5%, respectively. These differences can be attributed, in part, to the timing of the forecasts and the assumptions underlying the calculations. None of these organizations is currently forecasting an annual contraction of the economy.
A serious problem persists in the external sector. According to IMF estimates, the current account deficit will increase from 19.7% of GDP in 2025 to 22% in 2026 and 22.8% in 2027. This means that the country's payments on current external transactions significantly exceed its receipts. The difference must be financed through capital inflows, the use of external assets, or other sources.
Such a deficit does not in itself signal an impending financial crisis. However, the sustainability of the current account depends on the country's ability to attract external financing. At the same time, investments aimed at expanding production and exports have a different effect on long-term development than funds used primarily to cover current needs.
Inflation creates additional pressure. The IMF expects average annual consumer price inflation to accelerate from 7.4% in 2026 to 9% in 2027. If household incomes rise more slowly than prices, purchasing power will decline. For businesses, high inflation complicates the planning of expenditures and investments, especially in an environment of weak demand.
The situation may be further complicated by the tax policy for 2027. The government's package calls for a 20% increase in the excise tax on diesel fuel, a 10% increase on most excise-taxable goods, and a 20% increase on tobacco products. In addition, starting April 1, it is proposed to change the VAT treatment of energy resources for residential consumers: natural gas up to 150 cubic meters per month will be taxed at a rate of 8%, and consumption exceeding this volume will be taxed at 20%; electricity consumption up to 150 kWh will remain exempt from VAT with the right to a tax credit, while consumption exceeding the established limit will be taxed at a rate of 20%. Initially, the VAT-exempt limit for electricity was 100 kWh; however, on October 15, the government supported a proposal by lawmakers to increase it to 150 kWh. If the changes are finally adopted, they could increase expenses for some households, while the excise tax hike could raise costs for businesses and transportation rates.
In May, the IMF linked the deterioration in the economic outlook to the energy shock, rising energy costs, and weakening external demand. The Fund also warned of the potential consequences of disruptions in the fuel and fertilizer markets for agriculture.
Against the backdrop of worsening economic forecasts, an IMF mission will be in Chisinau from October 21–28. In May, the Fund and the Moldovan authorities reached a preliminary agreement on a new three-year Program of Coordination of Economic Policies (PCI), which, unlike previous programs, does not provide for the granting of loans. However, five months later, an official announcement of its approval by the IMF Executive Board has not yet been published.
The agreed-upon economic policy guidelines call for reducing the government budget deficit to 3.5% of GDP by 2029, improving tax administration, and increasing the efficiency of state-owned enterprises. However, limiting the budget deficit must be balanced with funding for infrastructure, social obligations, and economic reforms. With slow economic growth, it becomes more difficult to find additional funds without increasing the tax or debt burden.
The EU Growth Plan for Moldova offers certain opportunities. However, its economic impact will depend on the implementation of projects capable of increasing labor productivity and expanding production and exports.
International financial organizations are currently forecasting economic growth for Moldova. However, given weak economic growth, high inflation, and an impending change in the tax burden, even a relatively minor new shock could be enough to push GDP back into negative territory. // 21.10.2026 – InfoMarket.