Despite weaker overall domestic demand caused by subdued consumption and de-stocking only partly compensated for by stronger investments, Moldova’s GDP (chart) increased by 1.9% y/y and by 1.1% m/m in Q1, the sharpest quarterly advance since Q4 2022, according to data published by the statistics bureau.
In absolute terms, the GDP reached MDL67.4bn (€3.5bn) in Q1 and €15.4bn in the 12 months to March 2024.
In seasonally adjusted terms, the quarterly GDP in Q1 was (marginally) the highest in more than two years.
However, this didn’t change the gloomy performance of the country’s economy, which has remained around the same level over the past five years (since before COVID-19) with some variations prompted by the multiple crises that hit Moldova.
But while Moldova’s economy returned to robust growth by historic standards after the COVID-19 crisis, the shock induced by the war in Ukraine in early 2022 seems to have blocked the country’s economy.
Speaking about the 1.9% GDP growth in Q1, many key sectors (manufacturing, utilities, agriculture, HoReCa) boasted double-digit growth rates, others posted more modest but positive performances (constructions, services to households) and a few dragged down the overall performance (transport and logistics in particular).
Overall, the gross value added increased by 3.4% y/y.
The smaller net taxes (-6.2% y/y in real terms) made a negative contribution.
The final consumption remained virtually flat, edging down marginally by 0.1% y/y.
Gross fixed capital formation advanced by 4.8% y/y but the stock of inventory contracted with a negative impact twice as deep on the total domestic demand.
It was the external demand that supported the GDP growth in Q1, compared to the same period of 2023. Exports increased by 1% y/y thanks to the 8% y/y advance of the exports of services, while exports of goods contracted by 3.3% y/y in volume terms.
Imports (goods and services) contracted by 4.1% y/y with consistent contributions from both segments of goods and services.
