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EACEA National Policies Platform:Eurydice
Political and economic situation

Moldova

1. Political, social and economic background and trends

1.4Political and economic situation

Last update: 4 October 2024

Political Situation

Moldova, a parliamentary republic, has experienced significant political changes since gaining independence from the Soviet Union in 1991. The political landscape is characterised by a multi-party system, with frequent shifts in power. The President, elected by popular vote, holds a largely ceremonial role, while the Prime Minister, named by the President and approved by the Parliament, is the head of Government and holds executive powers.

In recent years, the political situation has been marked by efforts to combat corruption, improve governance, and integrate more closely with the European Union. These political dynamics significantly influence the country's policy direction, including the education sector.

Economic Situation

As of 2023, Moldova's Gross Domestic Product (GDP) is estimated to be around 300 billion lei (16 billions of euro). This figure can fluctuate slightly due to exchange rates and economic conditions, but it reflects Moldova's relatively small and developing economy, heavily reliant on agriculture, remittances, and foreign aid. The country has been working towards economic reforms and modernisation to stimulate growth and reduce poverty.

During the last decade, Moldova has been able to sustain economic growth of about 3.1%  per year on average amid the pandemic and other economic headwinds. 

In Moldova, the most dynamic sectors driving economic growth are information technology (IT), agriculture, the pharmaceutical industry, and renewable energy. The IT sector has experienced rapid expansion due to favourable tax policies and skilled labour, making it a key player in the economy. Agriculture, particularly in wine and organic produce, remains a traditional strength with increasing export opportunities. Additionally, Moldova is investing in renewable energy, especially solar and wind, to diversify its energy sources. The pharmaceutical sector has seen dynamic growth, driven by increased domestic production and favourable regulatory reforms, investments in modern manufacturing facilities, and a focus on exporting to EU markets. These sectors, supported by reforms and foreign investment, are propelling Moldova's economic development.

Moldova has Free Trade Agreements (FTAs) with 43 countries. These include agreements with the European Union (via the Deep and Comprehensive Free Trade Area, DCFTA), the Commonwealth of Independent States (CIS), Turkey, and several countries within the Central European Free Trade Agreement (CEFTA). These FTAs play a crucial role in enhancing Moldova's trade by reducing tariffs and facilitating market access for Moldovan goods and services.

However, economic growth is constrained by several factors, including a lack of diversification, weak infrastructure, and limited foreign investment. Trade agreements with the EU have opened new markets for Moldovan products, but geopolitical tensions caused by the military aggression of Russia in Ukraine have also posed challenges, including disrupted trade, increased inflation, energy crisis, strained social services due to big a refugee influx, and economic uncertainty overall.

Between 2016 and 2022, the Republic of Moldova allocated from 5.4% to 6.4% of its GDP to education, making it one of the countries with the highest proportions of GDP expenditure on education. However, since 2006, when education expenditure in Moldova was 8.1% of GDP, and 2010, when it was 7.6% of GDP, it has been gradually decreasing over the years, approaching the EU average of 4.7% of GDP.

On the other hand, in 2020, the educational attainment levels of the adult population in Moldova were as follows: 27.9% had a high level of education, 54.5% had a medium level of education, and 17.6% had a low level of education.

Major Trends and Impact on Education

The socio-political context in Moldova has a profound impact on the education system. Political instability and economic challenges have led to inconsistent policy implementation and varying levels of investment in education. The shift towards European integration has driven educational reforms aimed at aligning with EU standards. Educational reforms in Moldova, have recently focused on creating a more flexible and modern education system that meets current economic and societal needs. Key objectives include improving curriculum quality, and enhancing assessment methods. The reforms also emphasize upgrading vocational and higher education to better align with labour market demands and international standards. Efforts include modernising school infrastructure, implementing new funding models, and promoting research and quality in higher education.

Economic difficulties, particularly high levels of emigration and reliance on remittances, affect the availability of resources for education and influence the socio-economic conditions of students. Despite these challenges, Moldova has made strides in increasing educational attainment levels, reflecting a growing emphasis on the importance of education for national development.