22 October 2006, "Mesager" News Program

THOMAS RICHARDSON: STATEMENT FOR MOLDOVA-1 TV:

 

We are in Moldova this time to conduct the first review under the PRGF program, as approved by the IMF Executive Board in May this year.

The IMF board approved a three year program for a loan to Moldova’s Central Bank of 118 million dollars. We will come back every 6 months to check on the implementation of the program and then design the economic program for 6 -12 months going forward. That is what we are doing now , working on a memorandum with the Government and the National Bank for 2007.

It’s important to mention that the memorandum was drafted by the Government and the National Bank and not us and they have shown strong commitment to the economic performance that the IMF can support.

The main issue that the Moldovan economy faces right now is the increase in natural gas prices and the difficulty in selling Moldova’s wine to the Russian Federation. The IMF and the rest of the international community can help Moldova to deal with this difficult economic circumstances, shocks as we call them, but also Moldova will have to adjust to these circumstances. There will be some sacrifices needed from Moldova as well. We are confident that the authorities have a clear plan how to deal with this difficulties the country faces and they are taking measure to adjust to them.

Our intention is to propose to the Executive Board an increase in the size of the IMF loan, but I’m not on the position right now to say how much this would be.

We believe by increasing the amount of the IMF’s assistance to Moldova we can smooth the cost of adjustment to more difficult economic situation.

We believe that the government has a clear plan to bring that bright-tightening about and to do so in a way that minimize cost of the adjustment for the poorest members of the society.

We believe that the economic prospects of Moldova are quite bright over the medium term. Moldova starting January will be a neighbor of the European Union, and the EU as well as other governments intend to provide substantial assistance to Moldova in order to help in minimizing the cost of the economic adjustments.

To summarize, the IMF like the rest of the international community is ready to help Moldova to deal with the difficulties it faces. Of course some sacrifices and difficult times are ahead, but we think the prospects are good and we are confident the Government will be able to deal with these circumstances.