According to the forecast by the European Bank for Reconstruction and Development (EBRD), Moldova will experience one of the largest economic downturns in the region. The reasons for this are the consequences of the war in Ukraine and problems in energy supply, which led to a 5.9% contraction of the economy in 2022. The impact of these factors continues in 2023, although some improvement is expected in the second half of the year.
The proximity to the conflict zone continues to affect investment activity and exacerbate the consequences of real income reduction for the population. However, a positive aspect is the rapid decrease in inflation due to tightened monetary and credit policies and weakened domestic demand.
EBRD notes that external financing provided by the official sector helped cover the external and fiscal financing deficits in 2022, supported the exchange rate, and replenished foreign reserves. This support is likely to continue in 2023, along with an enhanced IMF program, contributing to macroeconomic stability.
EBRD forecasts a potential 1.3.
