Page 108 - SE Outlook Regions 2023

one – but the public debates on the document were, at the end of 2020,
at an early stage.

3.6.5 Construction

The construction sector was no exception to Moldova’s overall
economic slowdown in 2022. During the first three quarters, the volume
of construction works plunged by 18% y/y, after the sector already
posted negative dynamics (-0.3%) in 2021, after three years of
outstanding expansion. Amid increasing interest rates, sluggish
economic recovery and still weak disposable incomes, the sole driver
for the sector in 2023 and the coming years remain the public-funded
infrastructure projects and the industrial (and particularly logistic)
segment of real estate. Modern retail chains are also likely to expand
despite the modest advance of retail sales expected in the short term.

The activity contracted on all market segments, with very few
exceptions – maintenance works increased and the government’s
efforts to boost public investments (helped by foreign financing) were
visible in the comparatively softer decline of the civil engineering works.
In January-September 2022, the volume of construction works
decreased, by structural elements, by 21.9% for new construction works
and by 34.2% for capital repairs. The volume of current maintenance
and repair work increased by 7.7% y/y.

By construction objects, the volume of work decreased particularly for
the residential buildings (-28.5%) and non-residential buildings (-16.8%)
while the volume of engineering constructions also contracted by
-12.3%.

3.6.6 Major Sectors
Agriculture is one of Moldova’s key economic sectors and potential
growth drivers. But in 2022, the severe drought pushed down the
production and the increase of import quotas by the European Union
was not the best aid the country could have used. In fact, the Moldovan
apples are rather likely to find appropriate markets in the Middle East
while its maize, sunflower and wheat crops should be processed to a
higher rate domestically in order to increase the share of value-added
exports.

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