invasion of neighboring Ukraine, high energy prices, and the ongoing COVID-19 pandemic. 

Since gaining independence in 1991, Moldova has made some progress in adopting free-market economic reforms and enshrining democratic principles in its institutions.  As a result of Russian-imposed import restrictions on Moldovan goods, exports shifted away from markets in the Commonwealth of Independent States (CIS) in favor of European markets.

Moldova’s business and investment climate still presents significant challenges for those wishing to invest in or export to Moldova.  Moldova’s pro-Western President and government, which enjoy parliamentary support and trust among citizens and international partners, are committed to implementing reforms to strengthen Moldova’s institutions and improving its investment climate.  In 2021, Moldova continued to deal with the aftershocks of the COVID-19 pandemic and with an emerging energy crisis.  In 2022, the war in Ukraine led to an influx of refugees, logistical challenges for international trade, and an escalating energy crisis.  This has squeezed the country’s resources for long-term development priorities as the government has had to focus on short-term recovery measures.  Despite these challenges, the government and parliament have still made some progress on long-term reforms.

The government continues to deal with the fallout from a massive bank fraud in 2014, when more than a billion dollars was stolen from Moldova’s state coffers.  The government prioritizes the implementation of reforms, investigation and prosecution of those responsible for the fraud, and tackling the pervasive corruption that continues to undermine public trust and slow economic development.

A member of the WTO since 2001, Moldova has signed free trade agreements with a number of countries, including many of those from the former Soviet Union.  In December 2006, Moldova joined the Central European Free Trade Agreement (CEFTA).  In June 2014, Moldova and the EU signed an Association Agreement (AA).  Part of the AA is the creation of a Deep and Comprehensive Free Trade Area (DCFTA) over a period of ten years. The DCFTA removes most import duties and supports regulatory harmonization between Moldova and the EU.  Moldova signed a Free Trade Area (FTA) Agreement with Turkey in 2014.

Moldova benefits from its proximity to two large markets:  the European Union, which absorbs over 65 percent of the country’s exports, and the Russia-dominated CIS, which accounts for 15 percent of Moldovan exports.  Primary exports include food and beverages, agricultural products, apparel, and transport equipment. 

Moldova’s main imports include energy resources, natural gas, petroleum products, machinery, vehicles, and chemicals.  Most consumer goods and inputs are imported from abroad.

The government does not control the separatist region of Transnistria, a sliver of land on the eastern border with Ukraine.  Although the region maintains a separate monetary unit and its own so-called “army” and “customs service,” businesses on both sides engage in economic cooperation.  Negotiations have been held under the “5+2” format (Moldova, Transnistria, OSCE, Russia, and Ukraine + United States and EU) to find a settlement.  While there has not been a resumption of military hostilities since 1992, relations between the two sides remain contentious.