7/5/2023 0 Comments Eu pling in engleza![]() ![]() These efforts will now be bolstered by the European Council’s decision to grant European Union Candidate country status to Moldova. At the current economic juncture, it is paramount that short-term recovery measures are complemented by long-term reforms that will help steer the economy away from the current economic model. Import disruptions are expected to further increase price pressures, in turn eroding the competitiveness of firms and household incomes, especially for the poor.Īs economic activity continues to shrink due to shocks from the Russia’s invasion of Ukraine and the ongoing impacts of the COVID-19 pandemic, the Government, must find ways to mitigate the immediate economic impact while maintaining momentum on the long-term agenda. Additionally, Moldova continues to be substantially reliant on natural gas imported from Russia, including for powering its energy needs. Heavy reliance on imports to meet food and energy needs has left Moldova vulnerable to disruptions in the supply of food, energy, and commodity imports from Ukraine and Russia. The large wave of refugees has also created a challenging socioeconomic environment in the medium term, especially if many migrants remain but fail to find employment opportunities. The influx of refugees to Moldova has resulted in additional fiscal costs, squeezing resources for long-term development priorities. Moldova is one of the countries most affected by the war in Ukraine, not only because of its physical proximity but also because of its inherent vulnerabilities as a small, landlocked economy with close linkages to both Ukraine and Russia. The pandemic, the energy crisis, and the refugee crisis caused by the Russian invasion of Ukraine starkly exposed the vulnerabilities of this growth model to shocks. ![]() The decline in remittances, combined with a shrinking and aging population, has resulted in low productivity growth, and a significant number of the lower-income population has become dependent on pensions and social assistance. ![]() Although a growth model reliant on remittance-induced consumption has generated high growth and reduced poverty, it had become less sustainable well before the recent series of crises. Despite a solid economic performance over the past two decades, Moldova remains among the poorest countries in Europe. ![]()
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