Moldova climbs five positiions in world ranking of economic freedom

Chisinau, 5 February /MOLDPRES/- Moldova ranked 105th out of 180 countries in the ranking of the US Foundation Heritage and The Wall Street Journal, according to the economic freedom index, which assesses the degree of opening national economies, according to the report “2018 Index of Economic Freedom”.

With a score of 58.4 points out of 100, Moldova climbed five positions in the world rankings, is in a group of 63 countries with deprived economies and is moving closer to countries which economies are rated “moderately free”. Over the past two years, Moldova has climbed 12 positions and improved its performance by one point.

According to the economic freedom index, Moldova ranks 40th out of 44 states in Europe, and its total score is below the regional average (68.8 points) and global (61.1 points). Moldova ranks immediately after Namibia and Nigeria and ahead of Tajikistan, the Russian Federation and Belarus in the world top. The report notes that the Moldovan economy has improved its ownership and judicial efficiency, which have surpassed the decline in government integrity and trade freedom.

“The Moldovan economy remains vulnerable to weak administrative capacity, bureaucratic interests, higher fuel prices, Russian political and economic pressure and unresolved separatism in the Transnistrian region”, the report reads.

According to experts, “Moldova has laws that protect all property rights. However, the judiciary sector remains weak and does not always guarantee the rights of citizens and foreign investors. Transparency International has called for the withdrawal of pending legislation that would impose impunity on corrupt officials, civil servants and businesses declaring assets acquired illegally”.

According to the authors of the report, “the financial sector is relatively stable, but the level of financial intermediation remains weak”.

Moldova recorded higher marks than in the previous year on 6 indicators out of 12, including the chapters “Property rights”, “business freedom”, “payment of taxes”, “freedom of labor” and others. The Moldovan economy stagnated on two positions, namely “freedom of investment” and “financial freedom”.

At the same time, Moldova was appreciated at the level of the countries at the top of the “tax burden” (85.3 points), “trade freedom” (78.3 points) and “fiscal health” (90), areas in which the Moldovan economy is qualified free or moderately free. “The tax rate on the incomes of individuals is 18 per cent and the tax on the profit of economic agents is 12 per cent. The tax system includes value added tax. The total tax burden equals 31.6 per cent of the total domestic product. Government spending amounted to 38.0 per cent of GDP over the last three years, and the budget deficit was estimated at an average of 2.1 per cent of GDP”, the report said.

Economic freedom is assessed on 12 domains, the score being given for the degree of freedom of business, trade, fiscal freedom, freedom from government intervention, monetary freedom, investment, financial, labor market, respect for property rights, and lack of corruption.

Hon Kong, Singapore and New Zealand are the top three places in the world rank.

(Reporter V. Bercu, editor A. Răileanu)