Successive governments have committed to eradicating pervasive corruption at the national and local levels, particularly in the judicial system.  While progress has been slow, Moldova has risen steadily in the Transparency International Corruption Perceptions Index since 2016, ranking 76 out of 180 countries in 2024.
The war in neighboring Ukraine has affected Moldova significantly, exposing its inherent vulnerabilities as a small land-locked country with historic economic ties to both Ukraine and Russia.  Import disruptions in supply of food, energy, and raw materials have resulted in increased prices.  An escalation of the war could lead to further refugee flows to and through Moldova and severe socioeconomic consequences.
Moldova is implementing an ambitious reform agenda to address the legacy of a large bureaucracy, which until now enjoyed significant and economically inefficient discretionary power. A Soviet-era bureaucratic regulatory framework has historically stifled economic reforms necessary to encourage entrepreneurship and private sector oriented economic growth.  In preparation for potential EU accession, in September 2023 the Government of Moldova submitted its progress report on fulfillment of nine conditions (many of which are focused on justice reforms) specified by the European Council.  The government has taken steps to introduce laws and regulations to harmonize Moldovan practices with EU legislation, but work remains to elevate local standards to EU requirements.  For example, at the municipal level in particular, businesses still face cumbersome licensing procedures and excessive authorization requirements.
Persistent challenges over the years include an aging population and a dwindling labor force, especially after Russia’s 2022 full-scale invasion of neighboring Ukraine.
Intellectual property rights (IPR) legislation is robust and in keeping with international standards; however, IPR enforcement remains weak.
The large inflow of remittances has led to consumption-based growth, which exposes the economy to risks during regional downturns.  Dependence on Russian energy imports and an economy that does not efficiently use energy are challenges.  Weather-related events such as drought and flooding are inherent risks in the agricultural sector.
Another challenge is Moldova’s relatively small market.