Moldova Economy - 2005

Economy - overview:
Moldova remains one of the poorest countries in Europe despite recent progress from its small economic base. It enjoys a favorable climate and good farmland but has no major mineral deposits. As a result, the economy depends heavily on agriculture, featuring fruits, vegetables, wine, and tobacco. Moldova must import almost all of its energy supplies from Russia. Energy shortages contributed to sharp production declines after the breakup of the Soviet Union in December 1991. As part of an ambitious reform effort after independence, Moldova introduced a convertible currency, freed prices, stopped issuing preferential credits to state enterprises, backed steady land privatization, removed export controls, and freed interest rates. The government entered into agreements with the World Bank and the IMF to promote growth and reduce poverty. The economy returned to positive growth of 2.1% in 2000, 6.1% in 2001, 7.2% in 2002, 6.3% in 2003, and 6.8% in 2004. Further reforms will come slowly because of strong political forces backing government controls. The economy remains vulnerable to higher fuel prices, poor agricultural weather, and the skepticism of foreign investors.

GDP:
purchasing power parity - $8.581 billion (2004 est.)

GDP - real growth rate:
6.8% (2004 est.)

GDP - per capita:
purchasing power parity - $1,900 (2004 est.)

GDP - composition by sector:
agriculture: 22.4%
industry: 24.8%
services: 52.8% (2004 est.)

Labor force:
1.36 million (2004 est.)

Labor force - by occupation:
agriculture 40%, industry 14%, services 46% (1998)

Unemployment rate:
8% (roughly 25% of working age Moldovans are employed abroad) (2002 est.)

Population below poverty line:
80% (2001 est.)

Household income or consumption by percentage share:
lowest 10%: 2.2%
highest 10%: 30.7% (1997)

Distribution of family income - Gini index:
40.6 (1997)

Inflation rate (consumer prices):
11.5% (2004 est.)

Investment (gross fixed):
17.1% of GDP (2004 est.)

Budget:
revenues: $648.1 million
expenditures: $634.8 million, including capital expenditures of NA (2004 est.)

Public debt:
63.4% of GDP (2004 est.)

Agriculture - products:
vegetables, fruits, wine, grain, sugar beets, sunflower seed, tobacco; beef, milk

Industries:
food processing, agricultural machinery, foundry equipment, refrigerators and freezers, washing machines, hosiery, sugar, vegetable oil, shoes, textiles

Industrial production growth rate:
17% (2003 est.)

Electricity - production:
3.876 billion kWh (2002)

Electricity - consumption:
4.605 billion kWh (2002)

Electricity - exports:
0 kWh (2002)

Electricity - imports:
1 billion kWh (2002)

Oil - production:
0 bbl/day (2001 est.)

Oil - consumption:
24,000 bbl/day (2001 est.)

Oil - exports:
NA

Oil - imports:
NA

Natural gas - production:
0 cu m (2001 est.)

Natural gas - consumption:
2.05 billion cu m (2001 est.)

Natural gas - exports:
0 cu m (2001 est.)

Natural gas - imports:
2.05 billion cu m (2001 est.)

Current account balance:
$-148.4 million (2004 est.)

Exports:
$1.03 billion f.o.b. (2004 est.)

Exports - commodities:
foodstuffs, textiles, machinery

Exports - partners:
Russia 31.4%, Italy 10.7%, Germany 9.5%, Romania 9.4%, France 6.9%, Ukraine 5.8%, Belarus 4.3% (2004)

Imports:
$1.83 billion f.o.b. (2004 est.)

Imports - commodities:
mineral products and fuel, machinery and equipment, chemicals, textiles (2000)

Imports - partners:
Ukraine 16.8%, Russia 14.7%, Germany 12.5%, France 9.9%, Italy 8%, Romania 5.3% (2004)

Reserves of foreign exchange and gold:
$390 million (2004 est.)

Debt - external:
$1.4 billion (2004 est.)

Economic aid - recipient:
$100 million (2000)

Currency (code):
Moldovan leu (MDL)

Exchange rates:
lei per US dollar - 12.33 (2004), 13.945 (2003), 13.571 (2002), 12.865 (2001), 12.434 (2000)