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IMF staff and the Moldovan
authorities have reached staff-level agreement on policies for completion of
the sixth reviews under the Extended Credit Facility and Extended Fund
Facility (ECF/EFF) arrangements and for the second review under the
Resilience and Sustainability Facility (RSF) arrangement.
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The economic recovery is taking
hold with growth projected at 2.6 percent this year and 3 percent next year.
The fiscal deficit is projected to decline from 5.2 percent in 2023 to 4.4
percent in 2024 and 4.0 percent in 2025.
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Program performance has been
mixed, with good quantitative results but delays in the implementation of
structural reforms.
Washington, DC: An IMF team, led by Alina Iancu, conducted discussions
over the past few weeks in Chișinău, Washington, and virtually, for the sixth
reviews of Moldova’s programs under the ECF/EFF arrangements, and the second
review under the RSF arrangement. Discussions have concluded, and Ms. Iancu has
issued the following statement:
“The Moldovan authorities and the IMF team have reached staff-level agreement on
policies to complete the sixth reviews of Moldova’s programs under the ECF/EFF
and the second review under the RSF. The agreement is subject to approval by the
IMF Management and Executive Board. Completing the reviews will make SDR 111.4
million (about US$148.3 million) available, bringing total disbursements under
the ongoing programs to about US$810 million.
“The recovery from adverse spillovers from Russia’s war in Ukraine and energy
price shocks is taking hold. Growth is projected at 2.6 percent in 2024 and 3
percent in 2025, driven by robust domestic demand. Inflation has remained
broadly within the National Bank of Moldova’s 5 ± 1.5 percent target corridor
since October 2023. Downside risks remain high, mainly related to the war in
Ukraine and renewed energy shocks. By contrast, faster progress on structural
reforms, including under the EU Growth Plan, and steady progress on the EU
accession path represent upside risks.
“The downward revision of the fiscal deficits for 2024 and 2025 to 4.4 and 4.0
percent of GDP, respectively, reflects stronger-than-expected revenues, driven
by buoyant wage and import growth. Meanwhile government spending has been kept
largely unchanged with a welcome rebalancing towards investment next year.
“While quantitative performance has been strong, implementation of structural
reforms has been uneven. The authorities completed conditionality related to
financial inclusion, the insurance sector, and state-owned enterprises, while
legal amendments to strengthen autonomy and governance of the National Bank of
Moldova are expected to be submitted to Parliament soon. Agreed actions to
establish the Anti-Corruption Court and ensure appropriate staffing of the
Anti-Corruption Prosecutor’s Office are pending. The switch from providing
in-bill energy subsidies to targeted cash transfers took place in time for the
current heating season. Other RSF reform measures are in progress but will
require more time to complete.
“Consideration of the reviews by the IMF Executive Board is planned for
mid-December The program is expected to include two more reviews and run until
October 2025.”
IMF Communications
Department
MEDIA RELATIONS
PRESS OFFICER: CAMILA PEREZ
Phone: +1 202 623-7100
Email:
MEDIA@IMF.org
Source