Social situation Remittances as a key source of income

Over the past few years, Moldova has made progress on poverty reduction and economic development. However, with an average annual per capita income of about 4,500 US dollars, the country is still one of the poorest in Europe.

Women in a shop in Moldova
Women in a shop in Moldova

The Human Development Index (HDI) currently ranks Moldova 80th out of the 191 countries assessed, below its neighbours Ukraine (77) and Romania (53).

More than one fourth of the population lives below the national poverty line. Living conditions in rural regions are significantly worse than in cities. There are deficits, in some cases severe deficits, in areas such as drinking water, sanitation, and health care. One group that is particularly affected by social exclusion, poverty and unemployment is the ethnic minority of the Roma.

Many Moldovans migrate to Western Europe or Russia for jobs. About one third of the working-age population is employed abroad. The population of Moldova has continuously decreased over the past few years – with negative consequences for the pension system and for the productivity and competitiveness of the private sector, which is faced with a shortage of skilled labour.

The economy and the population are heavily dependent on migrant remittances, which are the main source of income for many families. Consequently, the outbreak of the COVID-19 pandemic has hit them very hard, as many workers had to return home.