Moldova’s economy recovers after multiple shocks; IMF forecasts 2.3-per cent growth in 2026

Moldova’s economy is recovering after multiple shocks, but risks that affect economic growth still persist, triggered by the war in Ukraine. This is the conclusion of International Monetary Fund (IMF) experts, contained in the report published In Washington (USA) on February 27. The IMF Executive Board has completed the consultations with Moldova, conducted under Article IV of the institution’s Articles of Agreement.

The experts conclude that the country’s economy is on a recovery path, after multiple shocks in recent years, but significant vulnerabilities remain.

“The economy of Moldova is recovering after multiple shocks. We estimate an economic growth rate of 2.7 per cent in 2025 and 2.3 per cent in 2026, based on a good harvest, strong domestic demand and substantial financing on behalf of the EU. Household consumption and investment are benefiting from robust wage growth and increased lending, while industrial output has shown a significant increase, including in the food processing sector,” the report reads.

At the same time, the low level of exports continues to limit the pace of economic growth and contributes to a widening current account deficit. However, experts anticipate that inflation will return to the target range set by the National Bank of Moldova (BNM), namely 5% ± 1.5%, during 2026.

In the medium term, the IMF forecasts moderate growth, supported by higher investment and reforms, aimed at boosting productivity. Nevertheless, the labor market will stay affected by structural problems, including massive emigration and low competitiveness.

The experts draw attention to external risks, particularly the ones generated by the war in Ukraine and geopolitical developments. In addition, possible delays in implementing the EU Growth Plan or inefficient use of European funds might affect the economic outlook.

The IMF estimates that the budget deficit could increase to 4.8 per cent of the Gross Domestic Product (GDP) in 2026, against the backdrop of higher capital spending. The institution recommends continuing fiscal reforms, in order to limit pressures on public finances.

The banking sector is considered robust, but the rapid growth in lending and rising housing prices require close monitoring and the strengthening of prudential measures. At the same time, the IMF highlights the need to enhance crisis management capacity and continue reforms in the areas of governance and energy security.

The executive directors agreed with the main conclusions of the IMF experts and noted the improvement in economic prospects. However, they emphasized the need for prudent policies, in order to maintain macroeconomic stability and accelerate structural reforms, particularly in governance, competitiveness and economic resilience. The directors took note of the authorities’ interest in concluding a new agreement with the IMF, stressing that an active programme with the institution would be essential for revitalizing reforms and supporting the country’s European path.

The IMF underlines that the efficient and timely implementation of the EU Growth Plan and the commitments undertaken in the accession process will play a key role in backing reforms and unlocking the country’s economic potential.

The next round of consultations under Article IV is expected to take place in 12 months.