Press Release

Interlic News Agency - http://www.interlic.md

MOLDOVA MAY RECEIVE THE NEXT $15M TRANCHE FROM IMF IN SEPTEMBER 2003

Chisinau, April 18, INTERLIC. The International Monetary Fund is ready to give the next tranche of the credit in the amount of $15 million in September 2003, if the RM government fulfills all the preliminary measures, agreed upon with the Fund, by July 21, 2003. As INTERLIC News agency reports, Head of the IMF Assessment Mission and Advisor in the II European Department Marta De Castello Branco has declared it today, summarizing the results of two-week IMF Assessment Mission and the talks with the RM government.

The matter is of the approval of a new version of the Bill on the Pre-shipment Inspection, lifting all the export restrictions and amending the Budget Law and the Social Insurance Budget Law for 2003 for bringing them in line with the parameters, agreed upon with the IMF before.

Marta De Castello Branco has underlined that all these measures should be fulfilled before July 21, 2003 so that a sitting of the IMF Board of Directors on Moldova, slated for September can take place. The IMF Mission Head has noted that a delay in the fulfillment of the IMF conditions by the RM government can result in the cancellation of the sitting.

According to her, Moldova is given the last chance to fulfill these conditions and to resume the Program of Cooperation with the IMF.

The above program, designed for three years, was approved by the sitting of the IMF Executive Council in December 2000. It is financed in the frames of the Growth and Poverty Reduction Strategy.

In the frames of this program Moldova receives credits for the period of 10 years with a five-and-a-half-year grace period and a 0.5% annual interest. The total amount of credits, Moldova can receive in the frames of the above program is about $150 million. Until present time the IMF released three tranches of the credit for Moldova in the amount of $36.5 million.

According to Marta De Castello Branco, if the RM implements the measures, agreed upon with the Fund, pursues balanced monetary policy, and effects structural reforms, Moldova can receive two credit tranches from the IMF (one in September and second in December. Moreover, the IMF is ready to prolong the implementation of the above cooperation program between the RM and the IMF.

IMF REVIEWED ITS FORECAST FOR GDP GROWTH IN 2003 AND SET IT AT 6%

Chisinau, April 18, INTERLIC. The IMF has reconsidered its assessment of the GDP growth in Moldova in 2003 and forecasts its 6% increase. As INTERLIC News agency reports, Head of the IMF Assessment Mission and Advisor in the II European Department Marta De Castello Branco has declared it, summarizing the results of two-week visit by the IMF Assessment Mission and the talks with the RM government at a press conference today.

She has noted that the economic growth in Moldova, which exceeded the expected indices, made the Fund experts to correct their forecast. According to Marta De Castello Branco, the IMF had predicted a 5% GDP growth and a 7% inflation for Moldova before.

In the course of the two-week visit of the IMF Assessment Mission and the talks with the RM government they reconsidered their inflation forecast and consider that it will make up about 8%.

Alongside with it, the IMF experts underline that much will depend on the traditional summer deflation. Marta De Castello Branco has declared that the IMF estimates the performance of the National Bank of Moldova very high and, in particular, its measures on curbing inflation.

IMF CALLS UPON MOLDOVAN AUTHORITIES TO TO TAKE RADICAL STEPS TOWARDS AN IMPROVEMENT OF INVESTMENT CLIMATE AND LIBERALIZATION OF THE ECONOMY

Chisinau, April 18, INTERLIC. The IMF has called upon the RM authorities to take cardinal measures for the improvement of the investment climate, the business environment, as well as to liberalize the economy. As INTERLIC News agency reports, Head of the IMF Assessment Mission and Advisor in the II European Department Marta De Castello Branco has declared it, summarizing the results of two-week IMF Assessment Mission and the talks with the RM government at a press conference today.

According to her, excessive control and interference of the State into the activity of the private sector of the economy is one of the main problems to be solved by the RM government. Marta De Castello Branco has called upon the RM government to decide, whether it intends to build market economy or planning economy and to proceed from it in its further actions. According to her, many decisions, taken by the Executive authorities testify to the return to the planning economy.

She has underlined that the IMF expects concrete steps from the RM government to improve the investment climate, the business environment, to create acceptable conditions for the activities of the investors and for attracting new investors. Marta De Castello Branco has noted that, in the IMF experts’ opinion, the RM’s economy and its small market are in need of maximal liberalization, since the republic exists mainly owing to the agricultural export.

IMF EXPERTS CONSIDER THAT IN SPITE OF THE SHORT TERM THE GOVERNMENT MAY SUCCEED TO DESIGNATE THE COMPANY RENDERING PSI SERVICES

Chisinau, April 18, INTERLIC. The IMF representatives consider that the RM government will be able to find a company, which will provide services on the pre-shipment inspection and to launch the respective program in a month period after the approval of the Bill on the Pre-shipment Inspection by the Parliament.

As INTERLIC News agency reports, IMF Assessment Mission Head Marta De Castello Branco and IMF Resident Representative to the RM Edgardo Rugiero have noted at a press conference today that the Bill on the Pre-shipment Inspection was agreed upon with the RM government 4 weeks ago. They have declared, if it could approve and commit the document more quickly to the Parliament, the government would have more time for the selection of the company.

Marta De Castello Branco and Edgardo Rugiero have underlined that they are not interested in the selection process of the company, since such decision is to be taken by the government. They have also noted that the government can continue the implementation of the Pre-shipment Inspection Program with the SGS Company. “It is necessary to prolong that has already functioned”, the IMF representatives have noted.

Note by INTERLIC News agency: The last version of the Bill on the Pre-shipment Inspection envisages that only one company will have the exclusive right to render Pre-shipment Inspection services of the goods to be imported. The Company will be selected by tender.

The list of the goods, freed from the inspection will be determined by the government together with this company and it will be approved by the government. It is planned that the government should approve the company and all the documents, necessary for launching the inspection – the regulations and the payment methods.

THE IMF DOES NOT OBJECT TO THE GRADUAL REDUCTION OF THE INCOME TAX IN MOLDOVA UNDER CONDITION OF THE EXPANSION OF TAXABLE BASE

Chisinau, June 19, INTERLIC. The International Monetary Fund does not object to the gradual reduction the income tax in Moldova, but it considers, that this measure will have a positive effect only if the government takes measures for the expansion of taxable base due to reducing previously granted privileges in the payment of taxes. As INTERLIC News agency reports, Head of the IMF Assessment Mission and Advisor in the II European Department Marta De Castello Branco declared it at a press conference in Chisinau, summarizing the results of two-week IMF Assessment Mission and the talks with the RM government.

She has noted, that too big tax burden does not allow business to develop normally. At the same time, as she said, as budgetary receipts in Moldova are insignificant, the authorities of the republic should be very attentive and cautious in the decision making on the reduction of the income tax rates as it can deprive the treasury of the planned means.

Marta De Castello Branco has emphasized, that the IMF offers to carry out stage-by-stage reduction of the income tax rates provided that each subsequent step on their reduction will occur after the previous one gives a positive effect.