International Monetary Fund
Mission to Moldova
May 8, 2002
An IMF mission will visit Chisinau during May 14-21, led by Marta Castello-Branco, the
new IMF mission chief for Moldova. The mission will review the economic and
financial policies of Moldova and determine whether these policies are in line
with the Memorandum on Economic and Financial Policies signed by the Moldovan
authorities under the IMF's Poverty Reduction and Growth Facility (PRGF)
arrangement approved in December 2000.
The mission will discuss recent fiscal and monetary policy developments with the
government and the National Bank and seek an understanding on targets for key
macroeconomic variables for the remainder of 2002. The mission will also seek to
resolve a few outstanding structural policy issues. These include, in
particular, (i) the elimination of the state guarantee for the debt of
Moldovagas under the inter-governmental gas agreement between Russia and
Moldova; and (ii) the question of whether the civil code that was recently
adopted by parliament is compatible with the requirements of a market economy.
Moldova's macroeconomic development in the coming years will be affected by the
outcome of negotiations on debt service payments between the Moldovan government
and its commercial creditors. While these negotiations are the responsibility of
the Moldovan government and its creditors, the mission will seek clarification
of the government's position and be ready to provide advice.
If the mission reaches an understanding with the government on the macroeconomic
framework and on the outstanding structural policy issues, the IMF's Executive
Board could approve the resumption of financial support for Moldova in mid-July
2002. We hope that sufficient progress in implementing structural reforms can be
done to enable the Executive Board of the World Bank-scheduled to meet in
mid-June-to approve the proposed Structural Adjustment Credit (SAC-III) for
Moldova. This would provide the financing assurances needed for completing the
first review under the PRGF-supported arrangement, a precondition for resuming
IMF disbursements to Moldova.