Moldova Economy 2008

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. Moldova's dependence on Russian energy was underscored at the end of 2005, when a Russian-owned electrical station in Moldova's separatist Transnistria region cut off power to Moldova and Russia's Gazprom cut off natural gas in disputes over pricing. Russia's decision to ban Moldovan wine and agricultural products, coupled with its decision to double the price Moldova paid for Russian natural gas, slowed GDP growth in 2006. However, in 2007 growth returned to the 6% level Moldova had achieved in 2000-05, boosted by Russia's partial removal of the bans, solid fixed capital investment, and strong domestic demand driven by remittances from abroad. Economic reforms have been slow because of corruption and strong political forces backing government controls. Nevertheless, the government's primary goal of EU integration has resulted in some market-oriented progress. The granting of EU trade preferences and increased exports to Russia will encourage higher growth rates in 2008, but the agreements are unlikely to serve as a panacea, given the extent to which export success depends on higher quality standards and other factors. The economy remains vulnerable to higher fuel prices, poor agricultural weather, and the skepticism of foreign investors. Also, the presence of an illegal separatist regime in Moldova's Transnistria region continues to be a drag on the Moldovan economy.

GDP (purchasing power parity):
$9.999 billion (2007 est.)

GDP (official exchange rate):
$2.792 billion (2007 est.)

GDP - real growth rate:
6% (2007 est.)

GDP - per capita (PPP):
$2,200 (2007 est.)

GDP - composition by sector:
agriculture: 18.4%
industry: 22.4%
services: 59.2% (2007 est.)

Labor force:
1.333 million (2007 est.)

Labor force - by occupation:
agriculture: 40.7%
industry: 12.1%
services: 47.2% (2005 est.)

Unemployment rate:
2.1%; note - roughly 25% of working age Moldovans are employed abroad (2007 est.)

Population below poverty line:
29.5% (2005)

Household income or consumption by percentage share:
lowest 10%: 3.2%
highest 10%: 26.4% (2003)

Distribution of family income - Gini index:
33.2 (2003)

Inflation rate (consumer prices):
12.5% (2007 est.)

Investment (gross fixed):
25.3% of GDP (2007 est.)

Budget:
revenues: $1.764 billion
expenditures: $1.771 billion (2007 est.)

Public debt:
24.6% of GDP (2007 est.)

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

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

Industrial production growth rate:
6% (2007 est.)

Electricity - production:
3.881 billion kWh (2005)

Electricity - consumption:
5.551 billion kWh (2005)

Electricity - exports:
220 million kWh (2005)

Electricity - imports:
3.361 billion kWh (2005)

Oil - production:
0 bbl/day (2005 est.)

Oil - consumption:
14,500 bbl/day (2005 est.)

Oil - exports:
31.69 bbl/day (2004)

Oil - imports:
14,200 bbl/day (2004)

Oil - proved reserves:
0 bbl (1 January 2006 est.)

natural gas - production:
0 cu m (2005 est.)

natural gas - consumption:
2.35 billion cu m (2005 est.)

natural gas - exports:
0 cu m (2005 est.)

natural gas - imports:
2.35 billion cu m (2005)

natural gas - proved reserves:
0 cu m (1 January 2006 est.)

Current account balance:
-$569 million (2007 est.)

Exports:
$1.43 billion f.o.b. (2007 est.)

Exports - commodities:
foodstuffs, textiles, machinery

Exports - partners:
Russia 22.8%, Germany 12.2%, Italy 11.1%, Romania 9.7%, Ukraine 9.6%, Belarus 5.7% (2006)

Imports:
$3.59 billion f.o.b. (2007 est.)

Imports - partners:
Russia 20.8%, Ukraine 16.9%, Romania 13.4%, Germany 8.7%, Italy 6.1%, Poland 4.4% (2006)

Economic aid - recipient:
$191.8 million (2005)

Reserves of foreign exchange and gold:
$1.05 billion (31 December 2007 est.)

Debt - external:
$2.774 billion (30 June 2007)

Stock of direct foreign investment - at home:
$NA

Stock of direct foreign investment - abroad:
$NA

Market value of publicly traded shares:
$573.9 million (2004)

Currency (code):
Moldovan leu (MDL)

Exchange rates:
lei per US dollar - 12.177 (2007), 13.131 (2006), 12.6 (2005), 12.33 (2004), 13.945 (2003)