Moldova is a small lower-middle-income economy. Although it is among the poorest countries in Europe, it has made significant progress in reducing poverty and promoting inclusive growth since the early 2000s. A vulnerable political system, a polarized society, low productivity, demographic challenges, skills mismatches, and a high vulnerability to both climate-related and external shocks are Moldova’s biggest economic challenges.
Moldova’s large-scale out-migration, combined with decreasing fertility rates, has led to an alarming decline in the population and increased the share of elderly people. This puts pressure on the pension system and limits the available labour force and the country’s long-term competitiveness (World Bank, 2020).
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