Strada Mitropolit Petru Movilă 23/9
Chișinău 2004, Moldova
Moldova is a former Soviet state that has had a turbulent path to stability since declaring independence in 1991. The country’s transition from a controlled economy to a free market economy did not come without challenges. The economy was and still is dominated by agriculture, the process of breaking up state-controlled farms to individuals disrupted the market and caused a significant loss in productivity. Even with these challenges Moldova has made significant strides in recent decades. The economy has expanded by 5% annually in recent years, driven by consumption and remittances. Strong relationships with the EU have brought policy change and agenda reform. The EU is Moldova’s largest trading partner accounting for 70% of exports in 2018.
GDP growth in 2018 was strong at 4%, which was a small decrease from 4.5% in 2017, but growth is expected to remain robust in 2019. A strong currency along with increased demand caused a relatively sharp increase in domestic demand of imports, however exports didn’t keep pace leading to a negative trade balance. As a result, the country account deficit rose by 4.7 percentage points making it 10.5% of GDP in 2018. Remittances are still a major contributor to the economy, accounting for over 16% of GDP in 2018. However, remittances have steadily fallen since 2013 and has contributed to some of the slowdown observed in GDP growth. Other contribution to the deacceleration is the fall in domestic and international demand in key sectors.
A key contributor to Moldova’s future growth will be development of SMEs. SMEs are the backbone of Moldova’s economy, in 2016 99% of businesses in Moldova were SMEs, with micro enterprises make-up 93% of the business population. Additionally, SMEs contribute almost 66% of total value add to Moldovan economy and make-up 63% of employment. However, women’s entrepreneurship rates are lower, 25% of SMEs are owned by women. Growth among women owned firms has remained lower in recent years in four of seven industries in Moldova. However, women owned businesses appear to be more stable and less likely to fail. Women run enterprises are more engaged with hiring and developing women. Empowering women entrepreneurs will be vital to furthering Moldova’s growth and development. CEED has been active in empowering women entrepreneurs in Moldova for several years, providing and array of business and leadership programming. CEED Moldova has partnered with local private sector stakeholders as well as large donors to help facilitate entrepreneurial growth and development.