In 2025, Moldova’s economy faced a record trade deficit of more than $6.9 billion, with the current account deficit of the balance of payments reaching a record $4 billion.
This “superiority” of imports over exports and the growth of gross external debt to 10.1 billion euros by the end of 2025 (+2.4% since the beginning of the year) have a serious impact on the country’s investment attractiveness. Especially in these times, when investors are risk averse.
What is attractive about us?
According to preliminary data from the National Bank of Moldova, Moldova’s international investment position (IIP) at the end of the year amounted to -6,873.6 million euros, up 18.2% year-on-year. The ratio of net position to GDP amounted to 38.1% (+3.5 p.p.).
The 18.2% increase in the IIP deficit means that the gap between what Moldova “owes” to the world and what it “owns” abroad has become larger.
In other words, this is because external liabilities have grown faster than the state’s external assets. In the current context, this is deciphered in different ways.
When a foreign company builds a factory in Moldova or invests money in a bank, for IPI statistics this is considered as an increase in “liabilities” to non-residents. That is, the more people invest in the country, the larger the negative balance becomes.
Or another calculation. Foreign companies already operating in Moldova did not withdraw dividends, but invested them back into development (reinvested). This also increases the negative position.
IPI is also affected by the exchange rate difference (the NBM now gives calculations in euros), the recalculation of which, with a significant change in the exchange rate over the year, increases the negative balance.
In our case, the main role in the growth of negative IIP is played by external loans. When the state or the private sector is seriously borrowing abroad, for a developing economy like Moldova, the growth of the IIP is an alarming signal. Whereas the growth of negative position due to investments is a positive signal.
According to NBM data, Moldova’s external financial assets position in 2025 amounted to 6,967.0 million euros, decreasing by 7.4%, compared to the end of 2024. And the position of external liabilities amounted to 13,840.7 million euros, increasing by 3.8%. The ratio of external assets to external liabilities amounted to 50.3% (-6.1 percentage points compared to the end of 2024).
Foreign investments
NBM Governor Anca Dragu said that in 2025, an increase of more than 20% in investments was recorded, one of the highest growth rates in the country’s history.
According to Invest Moldova, despite the fact that such enterprises represent only 5.7% of the total number of firms in the country, they generate 23.2% of the national turnover and provide 13.7% of all jobs. Their labor productivity is 74% higher than that of local private companies.
The European Union remains the main investor, providing about 84-86% of all foreign capital.
The top 10 investor countries include the Netherlands, Italy, Romania, Germany, the United States, Austria, the United Kingdom, Switzerland and Turkey.
A significant part of investments (more than 64% in the second quarter of 2025) is formed by reinvested profits of foreign companies already operating in Moldova.
Trade deficit
According to NBM data, in 2025 the current account deficit of the Balance of Payments will increase significantly, reaching a record high of $4 bln (+3.2%), exceeding the level of 2020 by 4.5 times. Such calculations are given by economist Volodymyr Golovatyuk. This occurred as a result of an increase in the foreign trade deficit in goods, which also reached a record high of $6.9 billion.
“A significant increase in the deficit on goods (by $1.3 billion) was not offset by an increase in the surplus on trade in services (+ $106 million). The situation was not changed by the current income received by Moldova from abroad, including transfers from citizens of Moldova and grants both to the government and NGOs, which together increased by only $134 million. As a result, the current account deficit of the Balance of Payments increased by $985 million in 2025 and amounted to 19.7% of GDP”, – writes the expert.
Vladimir Golovatyuk considers the situation very alarming, especially given the events in the world. A country with such a high level of the Current Account deficit “is potentially unstable in financial and economic terms.
The expert reminds that the same value of the Current Account deficit (19.7% of GDP) was in 1998. It was then, as a result of an external shock, inflation rose sharply within a short period of time – from 11% in 1997 to 44% in 1999. GDP and other economic indicators also shrank.
“Things are no better now, and the situation in the region and the Middle East is archly complicated. So the risks of instability are extremely high,” Golovatyuk warns.
Capital outflow, but also a reduction in the external burden to GDP
According to the NBM, Moldova experienced a threefold capital outflow in the fourth quarter of last year, which amounted to 24.3 million euros, despite a 20.5% increase in capital inflows.
This movement reflects the revision of investment strategies and the current economic uncertainty. The data points to the need to monitor the balance of payments. The main reasons relate to the reinvestment of earnings abroad and a reduction in foreign direct investment inflows. Capital withdrawal indicates an increase in risks for the Moldovan economy, which may affect the stability of the national currency and the overall level of investment attractiveness of the country.
Moldova’s gross external debt as of December 31, 2025, according to the NBM, reached 10,110.6 million euros (+2.4 percent since the beginning of the year), which constitutes 56% of the country’s GDP (-2.7 p.p.).
Public external debt amounted to 42.6% of total external debt and reached EUR 4,310.9 million (+4.4% compared to end-2024). Private external debt accounted for 57.4% of the total and reached EUR 5,799.7 million, up 0.9% compared to end-2024.
Debt grew by 2.4% YTD, but its share of the economy fell to 56% of GDP (-2.7 p.p.), indicating that while the economy was slow last year, it grew faster than the country’s total liabilities.
The indicator of 56% of GDP is below the critical mark of 60% of GDP, which is often used by economists, although it demonstrates a high dependence on external financing.
