Experts warn administrative delays threaten Moldova's EU-backed projects
The Moldovan government will fulfill one-off public sector bonuses and energy subsidies under its Sept. 2 budget revision, but mounting deficits and administrative hurdles risk deep cuts to development and infrastructure projects, economic experts warned.
Sluggish revenues and unspent grants
Approved by the cabinet on Sept. 2, the fiscal amendment projects state budget revenues to reach €4.00 billion (approx. 80.27 billion MDL), while expenditures will climb to €5.15 billion (approx. 103.35 billion MDL). The fiscal deficit will expand by €108.1 million (approx. 2.17 billion MDL), rising from an initial €1.04 billion to €1.15 billion.
Revenue gains amounted to just €29.9 million (approx. 600 million MDL), driven primarily by value-added tax and excise duties against an annual inflation rate approaching 7%. Economic analyst Marin Gospodarenco noted that tax receipts remain subdued despite higher production and consumer prices, while an unspent allocation of approximately €47.8 million (approx. 960 million MDL) in foreign funding reflects internal management failures.
“When you miss out on one billion lei in external financing because documentation is incomplete, that is an administrative breakdown rather than a budgetary constraint,” Gospodarenco said. “With 40% of the pension budget subsidized by the state rather than social contributions, we face structural imbalances that require long-term funding solutions before the 2027 public wage reforms take effect.”
Under-execution and dependence on expensive debt
Economic expert Veaceslav Ioniță said authorities will cover targeted social commitments, including teacher bonuses and heating subsidies, but will ultimately scale back public investments.
“In my view, the final deficit will be significantly smaller because the government cannot fully execute its plans,” Ioniță said. “It creates a budget of promises that goes unfulfilled. Faced with shortfalls, authorities invariably cut spending, particularly capital investments.”
To curb reliance on high-interest domestic borrowing, economists urged Chișinău to streamline technical cooperation with the European Union and restore non-repayable grant inflows.
“Technical arrangements with the European Union must be established so that grants do not drop to the embarrassingly low level of €75 million (approx. 1.5 billion MDL),” Ioniță said. “We lack the administrative capacity to design, promote, and implement grant-funded initiatives, leaving the country dependent on expensive domestic loans.”
Translation by Iurie Tataru
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