A mission from the International Monetary Fund will visit Chisinau during October 17-31 to review recent economic developments and to assess financial performance and implementation of structural reforms in connection with the 3-year extended arrangement between the Fund and Moldova that was approved by the IMF’s Executive Board in May 1996. The mission, which will be led by Mr. David Owen of the IMF’s European II Department, also will hold discussions with the Moldovan authorities on a financial program and set of structural measures to be taken during 1997. Key issues will include: the 1997 budget; further tax reforms and measures to strengthen revenue collection; measures to reduce energy, wage, and pension arrears and to strengthen the finances of the Social Fund; monetary policy; privatization; energy sector restructuring; and acceleration of agriculture reforms.

Moldova’s performance under the 3-year extended arrangement with the IMF has been highly satisfactory. The first review of performance under the arrangement by the Fund’s Executive Board took place in Washington, DC on September 23, 1996, and the Moldovan authorities were commended for their efforts, through tight monetary and fiscal policy, to strengthen macroeconomic stability by further reducing the rate of inflation and maintaining the strength of the leu. The Board did, however, express concern with the continuing problem of budgetary and external energy arrears and urged the authorities to accelerate reforms in the energy and agricultural sectors. The Board approved disbursement to Moldova of the second tranche of Fund resources under the arrangement, in an amount of SDR 11.25 million (approximately US$16.2 million). With this disbursement, Moldova’s use of Fund resources now amounts to SDR 173.98 (approximately US$250 million).

Mark A. Horton
IMF Resident Representative
Chisinau, Moldova