Economic & Financial News Agency - Daily Electronic Magazine
Wednesday, September 18, 2002
FINANCIAL SITUATION IN MOLDOVA IS NOT MUCH WORSE THAN IN OTHER COUNTRIES,
ASPIRING TO HAVE THEIR DEBTS TO THE PARIS CLUB RESTRUCTURED
The financial situation in Moldova isn't much worse than in other countries
aspiring to have their debts to the Paris Club restructured.
According to the IMF Mission's Head who completed her visit to Moldova, Marta Castello-Branco, the procedure of the beginning of negotiations with the
Paris Club has several preliminary stages.
Evaluation of the country's financial state is among them: the amount of the
foreign debt against the amount of export, amount of foreign debt against state
budget revenues and other indicators. These indicators are better in Moldova
than in other countries. Then, bilateral creditors, members of the Paris Club
evaluate government's actions on overcoming the crisis.
According to the Mission's head, if Moldova manages to achieve restructuring
of debts to the Paris Club, it will have the right to ask other bilateral
creditors to restructure its debts on similar terms.
Answering journalists' questions about restructuring of bills given by the
government to the Gasprom, Marta Castello-Branco said the Fund can't exert
direct influence on the Cabinet in this process. However, the Fund reserves the
right to warn the government of the possible negative impact of the terms of
bills restructuring on Moldova's Balance of Payments.
INTERNATIONAL MONETARY FUND IS AGAINST DRASTIC REDUCTION OF TAXES
The International Monetary Fund stands against a drastic reduction of
taxes in Moldova. This was said by the IMF Mission Head Marta Castello Branco at
the news conference on Wednesday.
According to Marta Castello Branco, it is much more important now for the
republic to reduce the cost of business running, that includes both official
payments (licenses and patents) and unofficial ones.
In the opinion of Mission's head, the tax burden in Moldova is not that
great as in the neighboring states. She said that reduction of the tax burden
has a positive effect in case when the taxable base is increased and as a result
budget revenues grow. However, there isn't and there may not be precise
research concerning how many more taxpayers will pay as a result of reduction of
the income tax rate to 15%, but there are precise calculations as to how much
budget will miss.
The Fund thus keeps its position concerning tax rate reduction.
According to the IMF Resident Representative in Moldova Edgardo Ruggiero,
taking into account experience of other countries, it is necessary to reduce the
number of licensed kinds of activities, to simplify some procedures regulating
economy, to simplify the tax code and to introduce transparency in the country's
economic policy to improve the business environment in Moldova.
Answering journalists' questions concerning the SGS company, Marta Castello-Branco
confirmed the Fund's position that it is early to cancel the pre-shipment
inspection in Moldova. In her words, one of the indicators of effectiveness of
work of the SGS is the noticeable pressure of private business on the country's
leadership to cancel SGS. The IMF won't support the government's proposal to
exempt a number of goods from the pre-shipment inspection.
ACCORDING TO THE FORECASTS OF THE INTERNATIONAL MONETARY FUND, GDP GROWTH IN
MOLDOVA IN 2002 WILL AMOUNT TO ABOUT 6%
According to the forecasts of the International Monetary Fund, GDP growth in
Moldova in 2002 will amount to about 6%.
This was said by the IMF Mission Head Marta Castello-Branco at the press
conference on occasion of completion of the visit to the republic.
In the opinion of Marta Castello-Branco, it is necessary in present
conditions to be more conservative in the process of working out forecasts about
the GDP growth. The Mission's Head also said the Fund is satisfied with the
results of the first half-year, however, she didn't rule out that the achieved
results could be a result of the seasonality factor.
According to the IMF's forecasts, inflation in Moldova will amount to some 6%
till the year-end. The Fund earlier forecasted the amount of the inflation
processes in the amount of 8%.
IMF Resident Representative in Moldova Edgardo Ruggiero noted that
after analyzing the 2002 budget, the mission concluded that in the fourth
quarter of 2002 the Ministry of Finance will have to undertake additional
efforts in order to execute its expenditures side, because in that period the
budget will be under big pressure.