About the ILO in the Republic of Moldova

For labour markets a long recovery ahead

Moldova achieved important development results over the last two decades, building on an average annual GDP growth of 4.6 percent before the outbreak of the Covid-19 pandemic in 2020. Economic growth, high inflows of remittances, and social transfers have reduced the relative poverty.

The development gap between Moldova and the rest of Europe has narrowed down. In 2000, the country’s per capita income was 14 per cent of the average EU income; in 2020 the national income per person reached 29 per cent of the EU average. However, the country still has one of the lowest per capita incomes and gross wages per employee in entire Eastern Europe. Demographic challenges (aging of the population and continuous emigration) and limited structural transformation (with a quarter of workers still employed in agriculture) combined with incomplete economic transition and governance reforms hold back the country.

Even before the pandemic, economic growth was mostly jobless. A look at unemployment rates is misleading, they have been low (2019: 5% for the age of 15+, 2020: 3.8%). The real problems are low employment rates and high levels of inactivity, particularly among youth, women, and older workers.

While the economy is recovering from the strong recession caused by the Covid-19 pandemic (GDP decline in 2020: -7%, estimated growth in 2021: 4,5%), the much-needed recovery of labour markets is lagging. According to ILO calculations, the country saw a decline in working hours of 8.7% in 2020 (EU average 7.4%) which is equivalent to 85,000 full time jobs. In 2021, the loss of working hours only slightly decreased and is still at 6.8% (EU average 2.7%), equivalent to the loss of 82,000 full-time jobs. ILO forecasts for 2022 indicate a further reduction of working hours lost to 3% with a lot of uncertainty because of the next wave of the pandemic.

ILO Interventions in Moldova

The ILO has been active in Moldova since 2005 based on several Decent Work Country Programmes (DWCP). Recent ILO assistance included support to the Labour Inspectorate for improving safety at work, job creation through local employment partnerships (tailor made interventions agreed upon by labour market actors to come up with local solutions to specific employment challenges of a municipality or district), and reforms of the public employment service. New beneficiary stories from Moldova can be found here, here, or here.

A new DWCP for the period 2021 to 24 was signed in late 2021. This new planning framework for the delivery of ILO support to Moldova will cover the following three priority areas:
  • Inclusive and productive employment for youth;
  • Effective protection at work;
  • Improved social dialogue.
Text last updated 1/22.