The Republic of Moldova was ranked by the World Bank as the fourth-poorest nation in Europe in 2021 based on GDP per capita (5,230.7 USD). The COVID-19 epidemic and the energy crisis that started in 2021 severely exposed the country’s economic weaknesses 3. The expansion of hostilities in Ukraine beginning February 24 of 2022 also had a knock-on effect on the nation.
The escalation of hostilities posed a threat to imports because Moldova was significantly dependent on imports from Russia and Ukraine for its food and energy needs. This would have resulted in higher prices and greater economic vulnerability for the local population.
The unexpected expansion of foreign trade following market slowdown due to the COVID-19 pandemic2 and the subsequent global surge in gas prices had an impact on Moldova. The nation was already paying 647 USD per 1,000 cubic meters of gas in the beginning of 2022, a rise of about $200 USD from December 2021.
Gas prices have become more unstable as a result of the escalation of hostilities in Ukraine and the disruption of the gas supply chain, reaching nearly 2,000 USD per 1,000 cubic meters in September 2022 before falling once more to about 820 USD in November, still nearly twice as much as the price a year earlier.
Since gas is still the primary source of energy production, the rising price of gas has in turn caused an increase in energy prices, which has resulted in the largest price increase in country history and, consequently, a sharp decline in the population’s access to electricity. Prices for essential services like energy and consumer goods went up as a result, and the country’s inflation rate eventually reached a high of 34.6% in October 2022, which is four times greater than in October 2021 (8.8%).
By the end of January 2023, there were around 8 million displaced Ukrainians as a result of the escalation of hostilities that began in February 2022, with 755,368 of them migrating to Moldova and 108,824 remaining inside the nation.
The thousands of refugees living in Moldova are presumably suffering from economic challenges in addition to the sorrow they experienced when they were forced to abandon their homes.