Powell speech takes center stage in Tuesday’s economic events
Investing.com -- S&P Global Ratings assigned Moldova ’BB-/B’ long- and short-term foreign and local currency sovereign credit ratings on Friday, with a stable outlook.
The rating agency’s stable outlook reflects expectations that Moldova’s economic growth will gradually strengthen over the next one to two years while its net general government debt remains contained globally, despite projections of a moderate increase driven by public investment.
S&P also expects the government to maintain its commitment to reforms needed for EU accession, while regional geopolitical risks, including those related to the breakaway territory on the eastern side of the Dniester River (also known as Transnistria), do not escalate.
Moldova’s economy is dominated by basic sectors including agriculture and light manufacturing, with modest income levels globally. S&P projects per capita GDP at $8,500 for 2025, less than half that of Bulgaria, the EU member with the lowest per capita income.
After stagnating in 2024, economic growth is forecast to strengthen to 1.2% this year and reach 3.0% from 2027. The agricultural sector’s improved performance following last year’s drought is expected to support this year’s economic rebound.
The country’s institutional arrangements face challenges, with public opinion divided between pro-EU and pro-Russia orientations. Moldova also faces geopolitical risks from the Transnistria region and the war in neighboring Ukraine.
S&P expects policy continuity following the incumbent PAS party’s narrow retention of its parliamentary majority in the September election. The administration is anticipated to focus on fighting corruption, implementing reforms, and advancing toward EU membership, which Moldova targets within the next five years.
The rating agency projects fiscal deficits to remain elevated at close to 5% of GDP annually through 2028, partly due to implementation of the EU’s €1.9 billion Growth Plan package. Despite this, Moldova’s public debt is viewed as moderate globally, with net general government debt forecast to reach 43% of GDP by 2028, up from 35% at end-2025.
Moldova’s balance of payments position is considered vulnerable, with high reported current account deficits averaging 15% of GDP over the past three years. However, S&P believes these figures overstate external risks.
Inflation is projected at 7.7% in 2025 before gradually declining toward the central bank’s 5.0% target by 2027.
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