Transnistria’s economy during the Corona crisis
The Transnistrian economy entered 2020 on a relatively strong footing. Metal exports and electricity production – the two main sectors – showed high growth after trade restrictions for metals were lifted and a new electricity contract with Chisinau was signed. However, the Corona crisis put an end to the economic upswing. Very strict containment measures, a collapse of remittances and external demand have led to a severe recession. To make matters worse, the fiscal situation, which was already strained before the crisis, means that there is little room for additional public spending. With no help from monetary policy – which is focussed on maintaining the fixed exchange rate – and no access to external financial assistance, GDP is estimated to decline by 11% in 2020. While the crisis has been contained so far, it becomes obvious that the Transnistrian economic model is in need for fundamental reform in order to improve access to foreign markets and international payment channels.