Moldova’s economy contracted by 1.2% y/y in the first quarter of 2025, mainly due to a decline in goods exports, Economy Minister Doina Nistor said, quoted by NewsMaker. Nistor noted that growth in services exports could not offset losses in goods trade.

Domestic demand remained robust in Q1. Consumption (+4.9%), gross fixed capital formation (+16.1% y/y) and the change in inventory strengthened the aggregate domestic demand. However, Moldova’s GDP contracted by 1.2% y/y to MDL88.2bn (€4.54bn) in Q1, dragged down by industry (-8.7% y/y) and professional services (-20.4%), despite robust domestic demand for both consumption and investments, according to data published by the statistics bureau. 

“Growth in the services export sector could not compensate for the decline in goods exports,” Nistor stated, adding that the broader outlook for 2025 remains open to improvement.

The minister cited both external and domestic factors for the contraction.

“We are in a completely unstable situation, not only in Moldova, but also in the whole world. Many uncertainties, armed conflicts, tariff wars – all this, of course, affects the economic situation in our country,” she said.

Among the internal causes, Nistor pointed to reduced re-export volumes, a drought that affected agricultural output, and challenges in the automobile sector. Moldova previously re-exported mineral fuel to Ukraine at the start of the war, a trade that has since diminished due to shifting logistics. The agricultural sector also suffered from last year’s drought, leading to a decline in its GDP contribution. In addition, difficulties within European automotive supply chains have affected production orders to Moldovan suppliers.

“The situation in the automotive industry… is currently experiencing difficulties. Because of this, investors working with us receive fewer orders,” Nistor explained.

Despite the contraction, the minister highlighted positive trends, particularly in investment. “We are seeing positive signals in the economy, especially in the investment sphere. For five quarters in a row, entrepreneurs have been increasing investments in the development of their own businesses,” she said.

Nistor noted increases in long-term investment lending, reflecting purchases of equipment and adoption of new technologies. Wages also continued to rise, with the average wage growing by 14% in 2024 and by an additional 2–3% in early 2025.

She said the government has not yet revised its annual economic forecast, pending more data on the services sector, agricultural yields, and public investment impacts. However, a strong harvest is expected for grain crops, which account for approximately 75% of agricultural output.

Moldova's economy is projected to grow by 2% in 2025 and at rates of 2-3% in the coming years, according to the preliminary medium-term forecast for 2025-2028 released by the Ministry of Economic Development and Digitalisation (MDED).

The European Bank for Reconstruction and Development (EBRD) has lowered its forecast for Moldova’s economic growth in 2025 to 1.8%, down 0.2 percentage points from the February projection, according to the May edition of its Regional Economic Prospects report released on May 13.

Nistor concluded by reaffirming the government’s commitment to economic recovery, citing a €1.9bn public investment support package aimed at accelerating infrastructure and growth initiatives.