Gold prices higher, remain near record highs on rate cut bets
Investing.com -- Fitch Ratings has affirmed Moldova’s Long-Term Foreign-Currency Issuer Default Rating at ’B+’ with a Stable Outlook, citing the country’s commitment to policies that have preserved macroeconomic stability despite multiple shocks.
The rating reflects Moldova’s low but rising government debt with a manageable repayment profile, availability of external financial support, and higher GDP per capita than peers. These strengths are balanced against high exposure to geopolitical risks due to the war in neighboring Ukraine, a frozen conflict in Transnistria, and potential foreign interference in domestic politics.
Moldova successfully mitigated an early 2025 energy shock when Russian gas supplies to Transnistria were interrupted. The country avoided significant disruptions through improved external buffers, alternative electricity imports, and increased domestic production including from renewables.
The National Bank of Moldova cut its policy rate by 25 basis points in August after raising it by 290 basis points to 6.5% in January-February. Fitch expects annual inflation to enter the central bank’s target range of 5% ±1.5% by end-2025, averaging 7.8% in 2025 before declining to 5.9% in 2026.
Fitch projects Moldova’s current account deficit will increase to 17.6% of GDP in 2025 from 16% in 2024, highlighting vulnerability to energy price shocks. International reserves are expected to remain at $5.6 billion at end-2025, maintaining reserve coverage at 5.2 months of current external payments in 2026-2027, above the ’B’ median of 4.2 months.
The general budget deficit is forecast to widen to 4.9% of GDP in 2025 from 3.9% in 2024, mainly due to higher spending related to the EU’s Reform and Growth Facility. Government debt is projected to rise from 38.5% of GDP at end-2024 to 45.5% by 2027.
Economic growth is expected to recover to 1.4% in 2025 from 0.1% in 2024, accelerating to 3% in 2026 and 4% in 2027, supported by lower inflation, energy support measures, and recovery in agricultural output.
The parliamentary election scheduled for late September presents a risk of external interference, while the outcome could potentially slow Moldova’s EU integration process.
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