Press release - 16.02.2011
Prime Minister Vlad Filat and IMF mission head Nikolay Gueorguiev held a news briefing on the results of the second review mission regarding the implementation of the memorandum signed between Moldova and the IMF
The prime minister said that the economic programme implemented with the IMF's support plays a crucial role in the restoration of stability and confidence in Moldova. The outcomes achieved in 2010 come to confirm the seriousness with which the government treats the commitments undertaken towards the citizens, as well as the relation with the development partners, including the IMF.
"The Gross Domestic Product (GDP) recorded a 6.9-per-cent increase in 2010, thus significantly exceeding the initial forecast for the last year (1.5 per cent), as well as the subsequently revised forecast (3.5 per cent)," the prime minister said. He stressed that GDP got back to the level registered before the economic crisis.
"We have managed to keep the inflation under control (8.1 per cent in 2010) and substantially cut the budget deficit to 2.4 from GDP (the initial forecast was 7 per cent, and then revised to 5.4 per cent). These notable results were attained despite challenges faced by our economy," Vlad Filat said.
The prime minister emphasized that the progamme with the IMF is carried out in the parameters that had been agreed upon and the government will soon shift to the implementation of measures and reforms envisaged in the agreement with the IMF. Also, the cabinet will start considering and adopting the 2011 state budget in a short time.
Filat said that, starting from 1 July 1011, the salaries of budget-paid auxiliary staff will increase by 8.5 per cent. As many as 125,000 people will benefit from this.
Also, the government will allocate social assistance for January, February and March 2011, according to the formula applied in late 2010. The retirees with pensions less than 900 lei and the families from the social assistance system are to benefit from this help. In March, they will receive an overall amount of 390 lei for the three months. The beneficiaries are 521,000 pensioners and 33,000 less well-off families.
The prime minister said that the annual indexation of pensions will be made on 1 April 2011. Also, the teachers' salaries will rise by 12.5 per cent starting from 1 September 2011, after a previous increase of 12.5 per cent operated on 1 January 2011. As many as 69,000 teachers will benefit from this rise.
Vlad Filat also said that, starting from 1 September 2011, the civil servants' salaries will grow by 12 per cent, with 21,000 people due to benefit from it.
The quantum of the minimal guaranteed social assistance income will increase from 530 to 575 lei. This will serve as a basis to extend the social assistance system by attracting new beneficiaries.
"An important thing that we achieved as a result of negotiations with the IMF is the removal of ceilings to local taxes, just as local authorities' representatives demanded. This is a step forward and it fits into the government's efforts to decentralize the power," the prime minister said.
Filat noted that, to carry out the things agreed upon with the IMF, the cabinet ruled to adjust the quotas of the excise duties on tobacco products and strong benerages starting from 1 April 2011. A 50-per-cent increase will allow increasing the budget's revenues.
Vlad Filat said that the budget deficit agreed upon for 2011 will account for 1.9 per cent, in conditions of a 4.5-per-cent economic growth and an inflation rate of 7.5 per cent.
"The Moldovan government has a clear vision of the country's economic development. Yet, to successfully implement it, it is necessary that each state institution fulfills its duty responsibly and devotedly," the prime minister emphasized.
The head of the IMF mission, Nikolay Gueorguiev, appreciated the results attained by the Moldovan authorities while implementing the Moldova-IMF memorandum, He confirmed that, at present, the sides reached an agreement that is to be approved by the IMF leadership and the Executive Board at a meeting scheduled for next April. Under the agreement, Moldova will receive 50 million special drawing rights (SDR) (about 77 million dollars) to consolidate the budgetary position and fill the currency reserves.
The IMF representative said that Moldova sped up the economic restoration process, which exceeded experts' expectations. He added that the IMF expects a 4.5-5-per-cent economic growth and a 7.5-per-cent inflation in 2011-2012.
"We welcome the authorities' decision to cut the budget deficit to the level of 1.9 per cent of GDP in 2011 and continue the budgetary adjustment process in 2012," Nikolay Gueorguiev said.
The official also said that the mission held discussions on concrete reforms, aimed at stepping up financial stability, enhancing efficiency in the public sector, improving the business climate, extending social assistance programmes, etc.