Moldova minister predicts 2.5% economic growth

By Alexander Tanas

CHISINAU (Reuters) - Moldova should achieve economic growth of 2.5% this year, slightly better than previous forecasts, but much less than what the government hopes to achieve, the economic development minister said on Tuesday.

The former Soviet republic remains one of Europe's poorest countries, but under pro-European President Maia Sandu, elected in 2020, it sees market and political reforms as the cornerstone of its main objective of joining the European Union.

"The economy is only just emerging from recession. Compared to what we had 10 years ago, it is possible that we are living a bit better today," Dumitru Alaiba, Minister of Economic Development and Digitalisation, told Radio Chisinau.

Moldova needed to carry out more ambitious and broader changes, he said.

"Year after year, we miss out on economic growth because we do not have a favourable environment for business. Growth of 2.5% is clearly not enough. We have to do better," Alaiba said.

Government forecasts for GDP growth had previously stood at between 2.0 and 2.5%. Forecasts for the next three years were 3.5, 4.0 and 4.5%

Moldova, its economy badly hit by the war in neighbouring Ukraine, experienced negative growth of 5.9% in 2022 compared to a positive figure of 14.9% in 2021.

Figures for the first quarter of 2023 showed the economy shrinking 2.4% year-on-year. The central bank predicts a positive figure from the third quarter of this year.

(Reporting by Alexander Tanas in Chisinau; Editing by Ron Popeski and Grant McCool)