Authorities in the breakaway region of Transnistria, in eastern Moldova, are seeking a loan of over €122mn to cover a deepening budget deficit after Russia halted its long-standing practice of supplying free natural gas. The so-called Supreme Soviet of Tiraspol extended the region’s state of economic emergency until August 9, citing severe fiscal pressures, MoldStreet reported on July 10.

The economic downturn follows Russia’s decision to replace in-kind gas deliveries with limited financial stipends, forcing Transnistrian authorities to procure natural gas on market terms.

“The reason is the critical economic situation caused by the reduction in natural gas supplies, which led to a severe general economic crisis,” the separatist parliament stated, along with the decision to prolong the state of emergency.

According to updated budget documents for 2025, Transnistria projects revenues of 2.83bn Transnistrian rubles (approximately €145mn) and expenditures of 5.46bn rubles (over €280mn), resulting in a budget deficit of nearly €136mn. The administration intends to cover most of the shortfall through a loan, though the origin of the funds remains undisclosed.

Alexandr Korshunov, head of the Transnistrian legislature, said that financing for state programmes—including the Road and Environment Fund and Capital Investment Fund—has been suspended or drastically reduced. Despite the cuts, the authorities have pledged to prioritise payments for public sector wages and pensions.

The region’s foreign trade also contracted sharply. According to the State Customs Committee in Tiraspol, external trade (excluding gas imports) reached $502.9mn in the first half of the year, down 35% year-on-year. Imports fell 21%, while exports declined by 51%.

Transnistria’s main trading partners during the first half of 2025 were the Republic of Moldova (34% of trade turnover), Romania (15%) and Ukraine (10%). Trade with the European Union accounted for 33% of total external commerce, compared to 9% with the Eurasian Economic Union and 58% with other countries, according to NovostiPMR.