The separatist region of Transnistria in Moldova is facing a deepening economic crisis following a shift in Russia’s approach to subsidising its energy needs, local authorities confirmed during a cabinet meeting convened by the region's leader on June 17.

Vadim Krasnoselsky, president of the unrecognised Pridnestrovian Moldavian Republic (PMR, also known as Transnistria), summoned executive officials in Tiraspol to discuss the worsening fiscal situation and extended the region’s state of emergency on June 12 due to ongoing uncertainties in natural gas supply. Russia, which had previously supplied the breakaway region with near-free gas, began in 2025 to impose tighter restrictions and route financing through subsidies for gas purchases instead.

According to the state news agency NovostiPMR, Minister of Economic Development Sergei Obolonik reported that Transnistria’s industrial output fell by 43% — a loss of 3bn Transnistrian rubles ($186.3mn) — in the first five months of 2025. Output in the electric power sector dropped 51.5% year-on-year, while metallurgy and chemical industries contracted by up to 68%. Only the food sector, serving the domestic market, maintained stable production.

Exports declined 31.5%, excluding electricity shipments to the rest of Moldova, which have now ceased. The region's economic deterioration has also been fuelled by unstable energy supplies. Transnistria is currently dependent on limited Russian-financed gas deliveries via a Hungarian intermediary after Russia ceased direct gas flows to Moldova at the start of 2025.

Krasnoselsky acknowledged during the meeting that “traditional approaches that previously allowed the republic's economy to be maintained are no longer sufficient in the current conditions, and the reserves used have been practically exhausted,” Newsmaker reported.

Finance Minister Alena Ruskevich said funding sources for the budget have been significantly reduced, and social spending commitments are now at risk.

Looking ahead, Obolonik projected a 12% year-on-year drop in GDP in the second half of 2025, with industrial production expected to decline a further 30%. Agricultural output may fall by 6%, foreign trade by 20%, while inflation could reach 16%.

“We can expect no real growth in the economy,” Obolonik said. “The best scenario is for indicators to remain at this year’s levels.”