Editing Economy of Moldova (section)

==Overview==
{{Update|section|date=January 2017}}
{{more citations needed section|date=October 2012}}
[[File:Horse with cart.jpg|thumb|Horse-drawn carts in the Moldovan countryside.]]
Moldova's proximity to the [[Black Sea]] gives it a mild and sunny climate. The fertile [[Chernozem]] soil supports [[wheat]], [[maize|corn]], [[barley]], [[tobacco]], [[sugar beet]], and [[soybean]]s. Beef and [[dairy cattle]] are raised, and beekeeping is widespread. Moldova's best-known product comes from its extensive and well-developed vineyards concentrated in the central and southern regions. Moldova produces [[liqueur]] and [[sparkling wine]]. It is also known for its sunflower seeds, walnuts, apples, and other fruits. This makes the area ideal for [[agriculture]] and food processing, which accounts for about 40% of the country's [[GDP]].

In 2018, Moldova produced:
* 1.1 million tons of [[wheat]];
* 132 thousand tons of [[plum]];
* 174 thousand tons of [[potato]];
* 175 thousand tons of [[barley]];
* 2.0 million tons of [[maize]];
* 665 thousand tons of [[apple]];
* 707 thousand tons of [[sugar beet]] (the beet is used to manufacture [[sugar]] and [[ethanol]]);
* 730 thousand tons of [[grape]];
* 788 thousand tons of [[sunflower seed]].

In addition to smaller productions of other agricultural products, like [[rapeseed]] (85 thousand tons). Moldova has a production of [[grape]] and [[apple]] between the 20th and 25th largest in the world, and a production of [[plum]] and [[sunflower seed]] between the 10th and 15th largest of the world.<ref>{{cite web| url = http://www.fao.org/faostat/en/#data/QC/| title = Moldova production in 2018, by FAO| access-date = 2020-10-31| archive-date = 2016-10-16| archive-url = https://web.archive.org/web/20161016200146/http://faostat.fao.org/site/339/default.aspx#data/QC/| url-status = live}}</ref>

[[Image:MoldovanGDPBySector.svg|thumb|right|236px|GDP by sector, 1989, 1999 and 2015]]

Moldova has experienced economic difficulties, like many other former Soviet republics. Since its economy was highly dependent on the rest of the former [[Soviet Union]] for energy and raw materials, the breakdown in trade following the breakup of the Soviet Union had a serious effect, exacerbated at times by drought and civil conflict. The [[1998 Russian financial crisis|Russian rouble devaluation]] of  1998 had a deleterious effect on Moldova's economy, but economic growth has been steady since 2000.

Moldova has made progress in economic reform since independence. The government has liberalized most prices and has phased out subsidies on most basic consumer goods. A program begun in March 1993 has [[privatization|privatized]] 80% of all housing units and nearly 2,000 small, medium, and large enterprises, which led to a rise in homelessness and unemployment. Other successes include the privatization of nearly all of Moldova's agricultural land from state to private ownership, as a result of an American assistance program completed in 2000. A [[stock market]] opened in June 1995.

[[Inflation]] was brought down from over 105% in 1994 to 11% in 1997. Though inflation spiked again after [[Russia]]’s  1998 currency devaluation, Moldova made great strides in bringing it under control: 18.4% in 2000, 6.3% in 2001, and 4.4% in 2002. In 2003 inflation escalated again &ndash; due mainly to a drought-driven rise in agricultural prices &ndash; reaching 15.7%, although it was reined in to 12.5% in 2004. The local currency appreciated considerably in 2003 and the first months of 2004. By May, the leu had reached its highest level since the end of 1999. After the [[National Bank of Moldova]] increased considerably its purchases on the [[foreign exchange market]], the [[Moldovan leu|leu]] stabilized in November–December 2004 at 12.00-12.50 to the [[US dollar]].

Moldova continues transitioning towards a free-market economy. The country recorded its fifth consecutive year of positive GDP growth in 2004, with year-end real GDP growth of 8%. This growth is impressive considering that, prior to 2000, Moldova had recorded only one year of positive GDP growth since independence. Budget execution in 2004 was also impressive, as actual consolidated budget revenues exceeded projections by 1.4% for most of the year.

Privatization results in 2004 were not significant: several smaller companies and one winery were privatized in 2004, but the government postponed indefinitely the privatization of several larger state enterprises, including two electricity distribution companies. Sporadic and ineffective enforcement of the law, economic and political uncertainty, and government harassment and interference continue to discourage inflows of [[foreign direct investment]].

Imports continued to increase more rapidly than exports during the first nine months of 2004; Moldova’s terms of trade worsened, as higher-priced energy imports outpaced the value of Moldova’s main exports—agricultural and agro-processing goods.

During 2002, Moldova rescheduled an outstanding [[Eurobond (international)|Eurobond]], in the amount of $39.6 million, to avoid a potential default. In May 2004, Moldova redeemed [[promissory note]]s with a total value of $114.5 million to Russian [[Gazprom]] for just $50 million. Moldova informed its bilateral creditors in mid-2003 that it would no longer service its debts. The 2004 budget did provide funds for external debt service (interest) at some 6% of the government budget, the 2005 budget projects external debt service at some 4%. The [[International Monetary Fund]] (IMF) and [[World Bank]] resumed lending to Moldova in July 2002, and then suspended lending again in July 2003. Although Moldova passed a poverty reduction strategy in 2004, it has yet to reach an agreement with international financial institutions.

70% of total electrical energy power consumed in Moldova is imported from [[Ukraine]] and only 30% is produced in Moldova.

In 2021 Moldova's trade with Russia was $1.33b compared with the EU of $5.06. In 2022 the EU trade increased to $6.9b<ref>{{cite web |title=Ukraine Crisis: Moldova on the Crossroads |url=https://www.icwa.in/show_content.php?lang=1&level=3&ls_id=9762&lid=6244 |date=20 July 2023}}</ref>