Moldova’s output is expected to grow by 1.8% this year, lowering February’s forecast by 0.2 percentage points due to weak production and exports, according to a report published by the European Bank for Reconstruction and Development, IPN reports.

Growth in Eastern Europe and Caucasus countries is expected to continue to fall to 3.5% in 2025, before recovering to 4.3% in 2026.

The economic outlook for Moldova and Ukraine has been revised downwards, reflecting weaker demand from the European Union and the continued deterioration of Ukraine’s energy infrastructure. These include a marked increase in trade and economic policy uncertainty, weaker external demand and the direct and indirect effects of recently announced import tariff increases.

Most economies in the EBRD’s regions have downgraded their growth projections for this year, with the largest downward revisions in the Western Balkans, Central Europe and the Baltics.

EBRD Chief Economist Beata Javorcik said that while understanding the full macroeconomic effects of the announced tariffs will take time, it is clear that the regions have entered a period of heightened uncertainty and slower economic growth.

“Reducing trade tensions through constructive dialogue and building a consensus on trade policy among key stakeholders is crucial, as prolonged uncertainty has painful economic costs,” concluded Beata Javorcik.

Since 1992 to date, the EBRD has implemented 183 projects in the Republic of Moldova worth some €2,604 million.