Moldova Public Expenditure Review
2015
World Bank Group
Agriculture is vital to Moldova’s economy. It accounts for 14 percent of gross domestic product (GDP) and employs 25 percent of the labor force; together with agro-processing, it generates more than 20 percent of GDP. While the size of the agriculture sector is one of the largest in Europe, it is comparable to other countries at similar income levels. The sector is also a major foreign exchange earner, with agro-food products comprising about 60 percent of merchandise exports. The Government of Moldova (GoM) identifies agriculture as one of the main drivers of growth in its 2020 national development strategy. Agriculture in Moldova faces both short-and-long term challenges. Increasing public spending on agriculture is not an optimal response to these challenges. Instead, to make the sector more competitive and resilient to shocks, direct budget spending should be reduced in some areas and redesigned or increased in others. Tax expenditures can be streamlined to make them more efficient, cost effective, and equitable.
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