FLUX Newspaper Daily - Thursday,
October 26, 2006
Even though it praises the
Government’s successful performances,
IMF is concerned with the rising inflation in Moldova
The IMF mission, on a PRGF review visit to Chişinău, expressed its worries
regarding the rising rate of the inflation in the Republic of Moldova. The
experts admit that one of the main causes for inflation going up is the energy
resources price increase.
In the Press Conference organized on Wednesday, the head of
the IMF review mission , Thomas Richardson, declared that the core inflation,
excluding the energy price increase, is still high. The IMF staff believe that
Moldovan authorities could reduce the basic rate of inflation. According to Mr.
Richardson’s opinion, the admissible level of inflation in Moldova should be
below 10 percent. A level much higher above 10 percent would have an negative
impact on economic growth and would represent a tax on the poor, asserted the
Thomas Richardson mentioned that the National Bank has the
necessary mechanisms to control inflation. “Some countries tighten the monetary
policy, and as a result, the interest rates increase. The interests rates could
relatively rise in Moldova”, considers the IMF staff.
Moldova has to tighten the belt
Moreover, the IMF mission expressed the availability to
assist Moldova, together with other international organizations, in overcoming
the current difficult times. “Moldova will face some difficult times. That’s
why, it should tighten the belt”, said Thomas Richardson. However, the IMF
experts consider that Moldova will be able to reach an rapid economic growth on
In this regard, IMF assessed positively the level of
economic development. “The Republic of Moldova registered a progress in the past
6 months, in spite of the difficult economic circumstances it faces, the
Government succeeded to have a economic growth”, noted Thomas Richardson, adding
that both monetary and financial systems “function well and are in good hands”.
IMF experts consider that the Government and the National
Bank promote the necessary reforms for ensuring the economic growth, the export
markets diversification for Moldovan products, and strengthening of the
financial system. Taking all this into consideration, in particular the external
factors that affected the economic situation, the IMF will increase the loan for
Moldova by $ 45m.
The mission and the authorities reached a preliminary
agreement on a new MEFP for 2007. This agreement as always will need to be
reviewed by the IMF Management, following which it will be submitted to the
IMF’s Executive Board for consideration. At the same time, Thomas Richardson
declared that the three year program, approved in May this year, envisaged a
total loan amount of $118m. However, the mission intends to propose the IMF
Management an increase up to $ 163. It is hoped that the IMF Executive Board
will be able to consider this proposed agreement in mid-December.
Also Mr. Tarlev, asserted at the conference that the low
level of economic growth is due to the rise in natural gas prices and the
Russian embargo on Moldovan wine.
According to the National Statistics Bureau, the inflation
rate went up in September this year, by 9,1 percent compared with the rate
registered in December 2005.