Moldova & IMF IMF Activities Publications Press Releases


Chisinau, September 10 (INFOTAG). A technical mission from the
International Monetary Fund has completed verification of the
Moldova's draft 2002 Budget.

The chief result of the consultations held in the Ministry of
Finance, National Bank and Ministry of Economy have been
"adjusted" macro-economic indicators. In particular, in the
draft budget agreed-on with the IMF the forecasted exchange rate
of the leu next year shall be MDL 13.5 to US$1, not 14.5 as was
in the draft's original version.

According to our unofficial data, the rectified draft budget
contains a lower indicator of budget expenditures for servicing
the external debt. Initially, the government was projecting to
use up to 72 percent Budget revenues for this purpose. Now the
Ministry of Finance is maintaining that the figure will only
insufficiently exceed the 2001 figure which, according to MoF
estimates, is going to be 37 percent.

The Mission has also agreed with the Ministry of Finance such
essential budget indicators as the income tax rate, yield on
state securities, inflation rate, parameters of borrowings from
MoF and the National Bank. These figures, however, are still
withheld, as the draft budget yet has to be approved by the
Cabinet of Ministers.

Prime Minister Vasily Tarlev has already commenced consultations
with ministries, trying to temper their budget appetites.
To-date, the ministries' requirements exceed the projected
expenditures by 2.3 billion lei.

MoF officials told your correspondent that all macro-economic
indicators strongly tend to decrease, which creates good
prerequisites for a further cheapening of financial resources in
the country. For the economy's real sector, money is thus
becoming more accessible and cheaper.

If the Government approves the draft 2002 Budget without delay,
this will create quite fair chances to restore good relations
with the International Monetary Fund as early as in October.
Such relations will give the Tarlev Government a chance to
receive up to $20 million from the World Bank under SAC-II and
SAC-III programs, and this money may help solve the budget
problems of the current year. Without this money, the Ministry
of Finance will have to introduce new amendments in the 2001
Budget through increasing its expenditures.