IMF Staff and the Moldovan Authorities Reached a Staff-Level Agreement
February 28, 2017
End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision.
An International Monetary Fund (IMF) mission led by Ben Kelmanson held discussions with the Moldovan authorities on the first review under an IMF-supported economic program in Chisinau from February 14-28, 2017.
At the conclusion of the mission, Mr. Kelmanson made the following statement today in Chisinau:
“IMF staff and the Moldovan authorities have reached staff-level agreement on the first review under an economic reform program supported by a three-year Extended Credit Facility and Extended Fund Facility (ECF/EFF) arrangement. The staff-level agreement is subject to approval by IMF Management and the Executive Board. Consideration by the Executive Board is expected in April, following the authorities’ implementation of a number of prior actions. Completion of the review will make available SDR 15.7 million (about US$ 21.2 million).
“The Moldovan authorities have continued to make progress in tackling long-standing vulnerabilities in the financial sector and advancing structural reforms. These efforts have helped to restore financial stability, and growth has started to return. The economy is projected to grow by 4.5 percent in 2017, higher than earlier expected. Continuing steadfast efforts to rehabilitate the financial system, including strengthening the governance and financial condition of banks, and enhancing regulatory and supervisory frameworks, are vital to sustain growth and job creation.
“Monetary policy continues to be focused on maintaining price stability in the context of a flexible exchange rate regime. To this end, the National Bank of Moldova should continue to improve its inflation targeting framework by strengthening operational procedures, forecasting abilities, and policy communications. The NBM should also stand ready to tighten monetary policy if inflation rises more quickly than projected.
“The 2017 budget and the medium-term budget framework are consistent with program targets and support growth-friendly measures. Key actions ahead include strengthening revenues, improving the efficiency of spending, and effective public administration reform. Resources made available from these efforts should be directed toward capital expenditure and targeted social spending. In addition, fiscal structural reforms should aim to further strengthening the fiscal framework.“The authorities continue to work on eliminating accumulated debt by energy companies and improving tariff-setting methodology, to ensure transparency and cost-recovery. They are currently assessing their poverty reduction strategy with the objective of updating it and aligning it with the UN Sustainable Development Goals.”