Moldova may receive a new tranche of a $94 million loan from the IMF by the end of April under the current financing program.
This was announced at a joint briefing in Chisinau by Prime Minister Dorin Recean and head of the International Monetary Fund mission Ruben Atoyan. The officials noted that following the visit to Moldova on 1-14 March, the IMF mission reached an agreement with the Moldovan authorities on the third review of the program financed by the Fund via the ECF (Extended Credit Facility) and EFF (Extended Fund Facility) crediting mechanisms. Atoyan said that the agreement will be approved by the IMF Executive Board till late April. The IMF head of mission said that the authorities implemented the program in Moldova in line with the agreed parameters, despite the difficult circumstances and multiple overlapping crises. The authorities meet all performance criteria and structural reforms are gradually moving forward, but efforts are still needed to promote integrity and independence in key institutions to prevent and combat corruption and strengthen anti-corruption legislation. There has been satisfactory progress in eliminating inefficiencies and inequities in the tax system. The new government has reiterated its strong commitment to implement the program and send clear signals of determination to firmly pursue a prudent fiscal policy that will strengthen the sustainability of the economy. Ruben Atoyan noted that given the high probability of materialization of risks, it is extremely important for the government to promote adequate policies that will be supported by external partners by providing budgetary support. The next, the fourth review of the program, will take place in the fall. Prime Minister Dorin Recean said that, during the current third review, the IMF mission discussed with the Moldovan authorities the latest macroeconomic developments, assessed the prospects and existing risks for the economy, macroeconomic risks, risks related to a possible increase in the prices of energy resources, volatility of the energy prices. "We have committed to implement the program agreed with the IMF, especially in terms of maintaining macroeconomic stability, which will help build a sustainable economy, have the support of development partners in efforts to strengthen institutions and economic development. The authorities will ensure stability and peace and will continue to do so, so that citizens can work, implement reforms, which should lead to creation of new jobs, increase incomes and salaries of citizens and boost economic development", Dorin Recean said. He noted that after the third review of the program is approved, Moldova will get $94 million from the Fund. "The Government of Moldova, the whole team will mobilize internal resources, optimize expenses and management discipline, including fiscal discipline. Growing the economy, improving the investment climate, supporting small and medium-sized enterprises and acting to meet the needs of citizens are central tasks of the Moldovan government," said Dorin Recean. He noted that because of the war in Ukraine, we are still in a zone of volatility and risks of price volatility, especially for energy. As previously reported, the 40-month program was approved by the IMF in December 2021, and in May 2022, the total lending was increased to about $826 million, of which $287.2 million have already been transferred. The ECF financing has a zero interest rate with a grace period of 5.5 years and a final maturity of 10 years, while the EFF financing has an interest rate equal to the base rate of the SDR, a maturity of 10 years and a grace period of 4.5 years. // 14.03.2023 – InfoMarket
