The economy of the Republic of Moldova, after the inflationary shock of 2022 and against the background of all the geopolitical and economic perils caused by the war in Ukraine and the fragmentation of the world economy, began a slow recovery process, growing by 0.7% in 2023. However, inflation reached the limits targeted by the NBM, being 4.2% in annual terms, which created conditions for price stability needed for the recovery of the economy, says the Financial Stability Report 2023, published by the National Bank of Moldova, IPN reports.
According to the NBM, 2023 was marked by a series of economic and financial challenges, but also by signs of resilience and adaptation. Globally, the economy showed notable resilience, witnessing a global GDP growth of 3.2%. However, inflation dynamics have been influenced by multiple geopolitical and economic uncertainties, being more persistent than the previous expectations in many major economies.
Despite the overlapping crises of the recent years (the pandemic crisis, price shocks, the war in Ukraine), the domestic banking system proved to be very resilient and stable, maintaining a high level of asset quality and liquidity. Banks’ capital adequacy stood at 29.9%, up from previous years, which ensured a high level of protection against possible shocks.
By the value of loans granted, the non-bank lending sector maintained a share of approximately 19% of the total loans granted in the banking and non-banking financial sectors, with a slight increase in 2022-2023. While the interconnectedness of these segments with each other and with the rest of the financial sector is low, the systemic risks caused by these components were reduced, the quality of their lending, especially in the case of savings and loan associations, which can attract deposits, remained a concern.
“The National Bank of Moldova continued to apply macroprudential tools, including capital buffers and requirements regarding the limitation of individuals’ indebtedness, to prevent and mitigate systemic risks. These measures proved their effectiveness and proved to be essential for maintaining financial stability in the face of economic challenges,” reads a press release.
The institution assures that it will continue to monitor the developments in the national economy and the financial sector in the future in order to identify the accumulation of systemic risks and to come up with the appropriate macroprudential tools so as to ensure the normal functioning of the system and the maintenance of financial stability.
