Moldova’s industrial production index (chart) increased by 10% y/y in February and the output in the manufacturing sector surged by 17.1% y/y, the statistics bureau BNS announced.

The seasonally and workday-adjusted industrial output indices surged by 7.7% m/m (total) and 13.6% m/m (manufacturing) respectively reaching a level not seen since the first part of 2022 — when the war in Ukraine disrupted the country’s economic activity. The industrial activity in Moldova has been impacted since the end of 2021 by higher natural gas prices charged by Gazprom and scarcer supplies.

Conversely, the more abundant and cheaper gas this year creates the opportunity for the resumption of industrial activity in Moldova. However, sustainable industrial recovery remains critically linked to foreign investments.

Given the still uncertain outlook, the investments are not likely to increase significantly despite the country’s firm steps toward European integration and the expected beginning of the accession negotiations later this year.

One of the industries that demonstrated steady advance through 2023 is electronic and optical device manufacturing, where the industrial output soared by 4.5 times y/y. The high volatility of the output reported in this industry partly explains the unusual annual advance. But the output in the 12 months to February increased by 38% y/y compared to a 4.0% decline in the entire manufacturing sector. The electric equipment manufacturing also increased significantly, by 34% y/y in 12 months to February 2024.

In contrast, light industrial production plummeted. The manufacturing of clothes contracted by 18% y/y in 12 months to February (08% y/y in February) while leather and fur processing activity shrank by 25% y/y (038% y/y in February).