Limba romana                                                                        

International Monetary Fund
Mission to Moldova

May 8, 2002

PRESS STATEMENT

An IMF mission will visit Chisinau during May 14-21, led by Marta Castello-Branco, the new IMF mission chief for Moldova. The mission will review the economic and financial policies of Moldova and determine whether these policies are in line with the Memorandum on Economic and Financial Policies signed by the Moldovan authorities under the IMF's Poverty Reduction and Growth Facility (PRGF) arrangement approved in December 2000.

The mission will discuss recent fiscal and monetary policy developments with the government and the National Bank and seek an understanding on targets for key macroeconomic variables for the remainder of 2002. The mission will also seek to resolve a few outstanding structural policy issues. These include, in particular, (i) the elimination of the state guarantee for the debt of Moldovagas under the inter-governmental gas agreement between Russia and Moldova; and (ii) the question of whether the civil code that was recently adopted by parliament is compatible with the requirements of a market economy.

Moldova's macroeconomic development in the coming years will be affected by the outcome of negotiations on debt service payments between the Moldovan government and its commercial creditors. While these negotiations are the responsibility of the Moldovan government and its creditors, the mission will seek clarification of the government's position and be ready to provide advice.

If the mission reaches an understanding with the government on the macroeconomic framework and on the outstanding structural policy issues, the IMF's Executive Board could approve the resumption of financial support for Moldova in mid-July 2002. We hope that sufficient progress in implementing structural reforms can be done to enable the Executive Board of the World Bank-scheduled to meet in mid-June-to approve the proposed Structural Adjustment Credit (SAC-III) for Moldova. This would provide the financing assurances needed for completing the first review under the PRGF-supported arrangement, a precondition for resuming IMF disbursements to Moldova.