--- title: "Higher public salaries may not mean higher living standards " url: https://radiomoldova.md/p/89551/higher-public-salaries-may-not-mean-higher-living-standards published: 2026-11-11T18:26:00Z language: en author: "Dumitru Petruleac" section: "Social" source: radiomoldova.md --- # Higher public salaries may not mean higher living standards > Moldova’s planned public sector pay increases from January 2027 may fail to improve employees’ purchasing power if inflation remains high, economic expert Marin Gospodarenco warned on Moldova 1 on November 11. ![](https://storage.radiomoldova.md/images/549a8f8b-8119-43c9-a543-3eef91927c12.jpg) Moldova’s planned public sector pay increases from January 2027 may fail to improve employees’ purchasing power if inflation remains high, economic expert Marin Gospodarenco warned on Moldova 1 on November 11. **A gradual overhaul of the pay system** Speaking on the public broadcaster’s “In Context” programme, Gospodarenco said the reform aims to correct salary disparities that have accumulated since the last major overhaul of the public sector pay system in 2018. Under the proposed changes, salary increases would range from 9% to 25%, depending on the occupational category. Employees in the justice sector would receive the smallest increase, at 9%, while healthcare and education workers would see rises of around 15%. Public administration employees would receive increases of 16–17%, and military personnel 19–20%, according to the economist. *“The Government of the Republic of Moldova, with the support of the Ministry of Finance, is seeking to correct existing inequalities in public sector pay. Those who have been paid less will receive somewhat more under this reform,”* Gospodarenco said. The economist estimated that the national public sector wage bill would increase by approximately 4.6 billion lei, reaching around 38 billion lei in 2027. The Government intends to finance the additional expenditure through higher revenues expected from the new fiscal policy, particularly excise duties. However, he stressed that these revenues had yet to be collected and that the sustainability of public finances would remain a key concern. *“This reform is not designed for just one or two years. Its implementation runs until 2032, with different stages, pay scales and coefficients being adjusted gradually,”* he said. **Inflation could cancel out salary increases** Gospodarenco identified inflation as one of the main risks to the reform's effectiveness, arguing that nominal pay rises do not necessarily translate into higher living standards. *“The most important thing public servants need to watch is the inflation rate. We can talk about a 15% or 25% pay rise, but if inflation reaches 11%, people's purchasing power declines,”* he said. If salaries and consumer prices increase at the same rate, employees effectively maintain their existing purchasing power rather than becoming better off. The economist argued that annual wage growth must consistently outpace inflation for public sector employees to experience a genuine improvement in their living standards. He also explained that employees on lower salaries would generally receive larger percentage increases under the new system, as the reform seeks to narrow historical pay gaps. However, substantial differences in actual earnings would remain. An employee earning 7,000–8,000 lei, for example, would gain slightly more than 1,000 lei from a 15% increase. By comparison, someone earning 40,000–50,000 lei could receive a 10–12% increase, Gospodarenco noted. The reform would also introduce safeguards for employees whose calculated salaries might decrease under the revised pay scales. Any difference between their previous earnings and the new amount would be covered through compensation, subject to the conditions established by law. *“Public servants need to understand that their salaries will not be lower than they are today,”* the economist said. **Higher pay for state leaders and public administration** Gospodarenco also defended the proposed salary increases for the country's senior officials, arguing that remuneration should reflect the responsibilities attached to their positions. He said the president's salary should not be lower than that of a government minister, whose monthly salary is expected to reach approximately 52,000 lei under the reform. According to the economist, the president's salary would increase by around 2.5 times after years of limited adjustments. However, he stressed that salary increases should extend across the entire public administration rather than disproportionately benefit senior officials. The economist pointed to disparities between ministers, doctors and teachers as evidence of the broader problem. He argued that competitive public sector salaries are also necessary to attract qualified specialists, particularly as Moldova prepares for EU membership and must align its legislation with European standards. **Tighter limits on bonuses and allowances** The proposed reform would also change the structure of public sector remuneration by increasing the share of fixed base salaries and limiting additional payments. Under the new system, the base salary would account for 70% of total remuneration, while the remaining 30% would consist of allowances and other additional payments. Gospodarenco said the reform would prevent excessively high allowances, which in some cases had reached 100–120% of base salaries. *“The base salary will account for 70% of total remuneration. That is already a positive development. The remaining 30% will consist of allowances. We have had excessive allowances of up to 120% or 100%. Such payments will no longer be possible under this law,”* he said. He also argued that remuneration for managers of state-owned enterprises should be linked to the average wage in the economy. Under the proposed rules, their salaries would be capped at between three and six average monthly wages, depending on the type and financial capacity of the enterprise. **Inflation and higher interest rates add to economic pressure** The economist also warned that rising prices and tighter monetary policy could put additional pressure on households and businesses. According to the National Bureau of Statistics, annual inflation reached 10.8% in October 2026, while consumer prices rose by 2.7% compared with September. Gospodarenco said inflation could reach 11–12% by the end of the year, above the National Bank of Moldova's previous expectations. He pointed to developments in the Persian Gulf and international oil prices as important factors influencing the domestic inflation outlook. The National Bank of Moldova raised its base rate to 11% on November 5, seeking to contain mounting inflationary pressures. Gospodarenco warned that the decision could lead to higher borrowing costs for households and businesses. *“Within one, two or a maximum of three weeks, interest rates on loans will rise again by around 1.5 percentage points,”* he said, adding that the increase would affect people with mortgage and consumer loans. More expensive borrowing could also discourage companies from investing, he argued, at a time when Moldova's economy remains weak. According to the National Bureau of Statistics, the country's GDP grew by just 0.6% in the first half of 2026 compared with the same period last year. **Reform to affect more than 227,000 public employees** The Government is due to examine the draft reform on Thursday, November 12. The proposed changes would take effect on January 1, 2027, and cover approximately 227,000 employees, including teachers, civil servants, mayors, judges, prosecutors and other public sector workers. The reform would reduce the number of salary reference values from ten to six, addressing disparities under which employees holding identical positions and having the same salary coefficients could receive salaries differing by 30–40%. In education, for example, the gross base salary of a teacher without a teaching qualification grade is expected to increase from 10,780 to 12,335 lei, or approximately 14%. The proposed changes would also raise the gross base salary of the general mayor of Chișinău from around 29,000 to approximately 40,000 lei. The president, Parliament speaker and prime minister would each receive a gross base salary of nearly 56,000 lei, compared with approximately 22,300 lei currently. The reform would further tighten performance bonus rules. Although nearly 99% of public sector employees currently qualify for such payments, the new system would introduce more selective eligibility criteria and cap the combined expenditure on performance bonuses and specific occupational allowances at 30% of an institution's annual base salary fund. According to the explanatory note accompanying the draft legislation, 44,651 public sector employees, representing 19.7% of the total, currently require compensation to reach the minimum monthly salary of 6,300 lei. The reform is expected to reduce this proportion to 14.1% in 2027. The Ministry of Finance estimates that total public sector staffing costs will rise from 32.79 billion lei in 2026 to approximately 37.4 billion lei in 2027 under the scenario involving a reduction in employers' social security contributions to 24%. The additional cost is estimated at 4.61 billion lei. 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