Where is the line between necessary and sufficient?
The importance of this assessment stems from concerns about the country’s debt level. While it may not seem high by global standards, it is raising more and more questions.
Fiscal pressure on taxpayers cannot be increased indefinitely. And the government’s ability to finance key public programs through other means is becoming increasingly doubtful as financial obligations mount—especially without any visible return on investment.
In other words, it won’t be possible to keep “eating through” loans without creating sources to cover them for long.
“The transparency and legality of these operations are under close scrutiny by Parliament, international institutions, the media, and civil society,” the Court of Auditors emphasizes.
According to data from the Ministry of Finance, the national debt stood at 138.5 billion lei at the end of 2025, which is approximately 12.9 billion lei more than in the previous year. The public debt-to-GDP ratio reached 39.2%, which is 0.4 percentage points higher than in 2024.
“Although Moldova’s debt remains below the 60% of GDP ceiling set by the Maastricht Treaty, the audit reveals a continuous increase in public debt over the past 5 years and the need for strict control over public debt through the implementation of sound policies to maintain financial stability in the medium and long term,” the auditors state.
According to the auditors’ calculations, public debt stood at 132.8 billion lei at the end of 2025, which is 11.4 billion lei more than in the previous year. Of this amount, 52.0 billion lei is domestic public debt, and 80.8 billion lei is external public debt. The audit also notes an increase in public debt per capita—from 29,600 lei in 2021 to 55,800 lei in 2025.
In 2025, Moldova signed 11 new financing agreements and one agreement to increase the amount of a previously concluded loan agreement, for a total of approximately 2.0 billion euros. Of the 12.2 billion lei in loan funds allocated last year, 9.3 billion lei were earmarked to support the state budget, and 2.9 billion lei were allocated to finance investment projects.
There is still not enough money for investments
The auditors’ analysis revealed a significant shift in the priorities for the use of external financing. This shift is characterized by the allocation of resources to support the state budget at the expense of investments. And this trend is growing stronger.
According to the auditors, this trend risks transforming external debt “from an instrument of economic growth into a mechanism for supporting government consumption, which will affect the future ability to service the debt and achieve the goals of the ‘European Moldova 2030’ National Development Strategy.”
According to the Court of Accounts’ calculations, loans totaling approximately 2.3 billion lei were refinanced to implement projects financed from external sources, and the refinanced borrowers repaid approximately 6.9 billion lei. However, by the end of 2025, the outstanding debt of the refinanced borrowers amounted to approximately 8.5 billion lei, of which 146.2 million lei consisted of past-due debts.
The outstanding balance of state guarantees amounted to approximately 6.5 billion lei, of which 4.5 billion lei consisted of guarantees provided under the “First Home” state program, while 2.0 billion lei relate to an external loan contracted by EnergoCom S.A. with the EBRD to implement the “Strengthening the Energy Security of the Republic of Moldova” project.
However, no new government guarantees were activated during 2025, and the balance of activated and unrepaid guarantees decreased to 0.35 million lei.
“Approximately 4.3 billion lei were spent on servicing the public debt, of which 2.5 billion lei were spent on domestic debt and 1.8 billion lei on external debt. Although debt service costs are declining overall, the audit shows that domestic public debt remains significantly more expensive than external debt, placing constant pressure on the state budget,” the report states.
Deviation from the plan “due to objective circumstances”
The audit also identified certain deviations from the statutory limits on external public debt and from the target ranges set out in the Medium-Term Debt Management Program.
According to the auditors, these deviations were caused primarily “external factors beyond the control of the Ministry of Finance, including significant exchange rate fluctuations and increased reliance on short-term financing, which requires frequent refinancing and exacerbates budgetary risks.”
Another significant issue identified during the audit concerns the decline in the recovery of receivables from banks undergoing liquidation. In 2025, the reduction in these receivables occurred mainly as a result of write-offs following the removal of banking institutions from the State Register of Legal Entities. Meanwhile, actual collections amounted to only 65.45 million lei.
As of December 31, 2025, the outstanding receivables of banks in liquidation owed to the Ministry of Finance amounted to 11.2 billion lei. Of Banca de Economii’s total receivables of 7.6 billion lei, 5.3 billion lei were transferred to the Ministry of Finance pursuant to the Agreement on the Transfer of Receivables dated June 4, 2025.
At the same time, the audit highlights the recurring nature of the write-off of historical debts of secured debtors resulting from their removal from the State Register of Legal Entities. Between 2023 and 2025, the total amount of historical debts written off in such situations exceeded 458.5 million lei.
No Beneficiary—No Debts
Similar conclusions were drawn in the case of refinanced beneficiaries. The audit shows that the reduction in their debt was due to the cancellation of obligations, changes in payment terms, and the termination of bankruptcy proceedings, rather than repayments.
In this context, the auditors highlight the critical situation of the State Enterprise “Railway,” whose debt was refinanced through eight consecutive adjustments, without these measures leading to the enterprise’s financial stabilization.
Although the Ministry of Finance, through the State Tax Service, is implementing debt enforcement measures, the results remain modest. In 2025, only 1.2 million lei were collected, compared to 1.8 million lei the previous year.
The Court of Auditors warns that the inability to collect outstanding debts from refinanced beneficiaries and debtors who have received guarantees does not relieve the state of its obligation to fulfill its commitments under existing external loans. Unlike domestic debtors, these obligations are covered by the entire state budget and all taxpayers.
And this path of increasing debt creates “an additional burden on public finances, which will affect long-term financial stability,” according to the agency.
