Total Debt of National Economy Exceeds Half a Trillion Lei

In the third quarter of 2022, the total debt of the national economy of Moldova reached a huge figure of 517.8 billion lei (approximately 25.8 billion euros or $27.7 billion), having increased by 9.5% compared to the fourth quarter of 2021. Data from the National Bank of Moldova (NBM) show that the ratio of total national economy sectors’ debt to gross domestic product (GDP) was 195.8% at the end of the third quarter of 2022. In other words, the debt of the national economy is almost twice as high as the country’s GDP, writes mold-street.com The biggest debt, estimated at about MDL 219 billion, is incurred by the financial sector due to its function of financial intermediary (42.4% of the total debt of the national economy), the NBM explains. Thus, the ratio of total debt of the financial sector to GDP was 82.9 percent (+0.1 p.p. compared to the fourth quarter of 2021). The non-financial commercial companies sector accounted for 160.95 billion lei or 31.1% of the total debt, while the public administration and household sectors accounted for over 97 billion lei and about 40.46 billion lei, respectively, which represent 18.7% and 7.8% of the total debt of the national economy. According to the NBM, total sector debt is defined as the sum of all sector liabilities to other sectors of the national economy and the Rest of the World sector, excluding shares and participation in investment funds and derivatives. National Bank data shows that the non-financial commercial companies sector showed the most significant variation in the trend, with the corresponding figure rising to 60.9 per cent in the third quarter of 2022. At the same time, the public administration and household sectors recorded a decrease in the value of this indicator compared to the fourth quarter of 2021 (by -0.6 and -0.1 p.p., respectively). The comparison made by NBM between countries with regard to this indicator reveals that the total debt of sectors of national economy of the Republic of Moldova was at a low level in the fourth quarter of 2021 compared to other countries. For example, in Romania and Poland it is about 300% of GDP, in Bulgaria and Germany it exceeds 400%, in Croatia it is almost 470% and in France it exceeds 650% of GDP.