After the collapse of the USSR and the declaration of its independence on 27 August 1991, the Republic of Moldova passed through a complex stage of transition to the market economy and experienced a significant economic recession.
The economic crisis in Moldova lasted for 10 years (from 1990 to 1999). During this period the GDP decreased almost by three times. Since 2000 the economy has been on the rise. This period is characterized by a steady recovery of the production output, which had a partly impact on poverty reduction. During the period 2000-2005 the GDP in real terms increased with 43 percent. Consequently the poverty rate decreased with 41.3 percent.
The country continues to maintain macroeconomic stability. Inflation reduced from 44% in 1999 to 10% in 2005. Besides, the national currency exchange rate remained rather stable while the currency reserves increased substantially.
The economic growth and circumspect external loans allowed for a decrease in the share of the public debt and the publicly guaranteed debt from 79 percent of GDP in 2000 to 27 percent in 2005. These achievements were due to the promotion of an appropriate monetary and credit policy coupled with a rigid fiscal and budgetary policy, as well as the implementation of tax reforms aimed at improving the tax collection system.
The development of the national economy in 2006 was negatively affected by a number of external factors.
These included unfavourable weather conditions, ban on the export of certain goods to the Russian Federation, coupled with limited access to other export markets, double increase in prices for energy resources imported from Russia, and a significant rise in prices for energy resources on other world markets.
This led to some deterioration of macroeconomic indicators. There was registered a reduction of the GDP growth rate, and a decrease in the industrial and agricultural outputs and the quantity of exported goods, due to which the trade balance deficit and the deficit of balance of payments increased. As a result there was an acceleration of inflationary processes. The increase in inflation does not have a monetary nature, and is dependent on prices for gas, energy resources and the increase in related production costs.
The external factors in 2006 created certain difficulties for the Government’s activity aimed at achieving its economic and social objectives. Economic difficulties faced by the Republic of Moldova in 2006 could have a negative impact on the population’s living standards. Therefore, the Government and the National Bank remain committed to undertake, upon need, further measures to attenuate and prevent potential shocks in the social and economic development of the country.
|Indicators||2000||2001||2002||2003||2004||2005||Sem. I 2006|
|GDP growth rate, % as compared to the previous year||2.1||6.1||7.8||6.6||7.4||7.1||5.0|
|Share of population under the absolute poverty line, %||67.8||54.6||40.4||29||26.5||29.1||-|
|Unemployment rate (ILO) %||8.5||7.3||6.8||7.9||8.1||7.3||6.41|
|Total external debt, as a ratio of GDP, %||133.9||113.5||109.6||97.7||73.1||68.4||-|
|Rate of growth of consumption prices (end-of-year), %||18.4||6.3||4.4||15.7||12.5||10||7.4|
|Average exchange rate, MDL/USD||12.43||12.87||13.57||13.94||12.33||12.60||13.02|
|Current account balance, as a ratio of GDP, %||-7.6||-1.8||-1.2||-6.8||-2||-8.3||-14.3|
|Residents’ income from the work abroad and employees’ transfers from abroad, as a ratio of GDP, %||13.8||16.4||19.4||24.4||27||31.4||31.1|
|Share of gross VAT in industry, as a share of GDP, %||16.3||18.7||17.3||17.6||17.1||17||15.2|
|Share of gross VAT in agriculture, hunting economy and silviculture, as a share of GDP, %||25.4||22.4||21.1||18.3||17.5||14.2||7.5|
|Ratio of average monthly pension to the average monthly salary, %||21||18||21||21||21||27||26|