Moldova’s central bank chief, Anca Dragu, highlighted the significant positive impact on the country’s economy following a decisive shift away from Russian energy sources. The nation, situated between Ukraine and Romania and aspiring for European Union (EU) accession, experienced a notable decline in inflation, reaching 4.2% from over 30% in 2022. Dragu credited this success to an influx of EU financial aid and the receipt of fresh energy supplies from Romania.
The recovery, surpassing initial expectations, demonstrated the resilience of Moldova’s economy after the disruptions caused by Russia’s invasion of Ukraine. Anca Dragu, who assumed the role of Central Bank Governor in late December, emphasized Moldova’s case as a success story for the EU, showcasing the positive influence it could exert on other nations, Bloomberg reports.
Having obtained candidacy status in 2022 for EU membership, Moldova has long accused Moscow of leveraging its gas resources to maintain influence over its political landscape. The country, with a population of 2.6 million, faced challenges such as an enduring Russian troop presence in the enclave of Transnistria, situated between the Dniester River and the Ukrainian border.
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Dragu, at 51, outlined her priorities during her tenure, emphasizing the need to enhance the central bank’s credibility and independence. She highlighted key reforms requested by the EU, including liberalizing the capital account and ensuring a fully-functioning market economy, as crucial steps toward EU accession.
Despite challenges such as the influx of refugees from Ukraine and disruptions to major transport routes, President Maia Sandu, aligning Moldova with the EU, aims for the country to be ready to join by 2030.
An important aspect of Dragu’s agenda is the recovery of funds lost in the aftermath of a $1 billion banking fraud scandal nearly a decade ago. Identifying critical legislative changes, especially in insolvency law, she aims to accelerate the recovery process and rebuild trust in Moldova’s banking sector.
Recognizing the banking sector’s crucial role in Moldova’s future development, Dragu emphasized the importance of efficiently funding citizens and entrepreneurs. She underscored the necessity of addressing the low demand for loans compared to the EU average, highlighting the pivotal role banks play in driving the country’s economic growth.