Moldova drops one position in world ranking of economic freedom

Chisinau, 28 January /MOLDPRES/ - Moldova has dropped one position, and ranks 111st in a global ranking on economic freedom which includes 178 countries, according to a study by the Heritage Foundation, in partnership with Wall Street Journal.

The Moldovan economy is described as "partially free" and recorded a score of 57.5 points out of a total of 100. The index of economic freedom of Moldova has advanced by 1.8 points since 2011. The modest progress confirms the ongoing efforts aimed at transforming the post-Communist economy into a free market system, say the authors of the report.

According to the Index of Economic Freedom 2015, just as in 2014, Moldova ranks 39th out of 43 countries in Europe, and its overall score is below the world average (60.4). Moldova is above countries like Greece, Russia, Belarus, Ukraine, but is surpassed by Romania, Georgia, Armenia, Macedonia, Hungary and Bulgaria. Switzerland, Estonia and Ireland are on the first three positions in Europe.

Moldova made improvements in three of the ten criteria, according to which the economic freedom index is calculated. Compared to the previous year, scores are higher for labour freedom, monetary freedom and corruption, which compensate the decline in business freedom and control of governmental spending.

"The economic performance is far below its potential. Persistent state interventions in the private sector favour growth of economic risks in an unstable political environment. Political instability leaves the fiscal policy fragmented and the corruption phenomenon persists in most bureaucratic areas", the study notes. The overall tax burden stands at 32 per cent of the domestic income. The governmental expenditures account for 40.1 per cent of the domestic output and public debt is equal to about 24 per cent of the Gross Domestic Product (GDP).

Moldova’s economic freedom score has risen by over 20 points over 20 years. This is the sixth largest improvement recorded by any country in the world.

The economic freedom is assessed in ten sectors. The points are awarded for the degree of freedom of business, trade, fiscal freedom, freedom from government intervention, monetary freedom, investments', financial, labour market freedom, respect for property rights, and absence of corruption. The higher the index is, the freer the economy is and less prone to state intervention.

Hong Kong, Singapore and New Zealand are on the first three positions in the global ranking.