Prime minister says IMF's new financing programme unprecedented for Moldova

Chisinau, 28 July /MOLDPRES/ - Moldova on 27 July reached an agreement with the International Monetary Fund on a new three-year programme. The accord was signed in the conditions of a global pandemic crisis and an economic crisis triggered by the pandemic and is unprecedented in Moldova’s history. Prime Minister Ion Chicu made statements to this effect at a news briefing today.      

According to forecasts, the real Gross Domestic Product (GDP) of Moldova will decrease by 4.5 per cent in 2020, with a subsequent recovery of 4 per cent in 2021. These are IMF’s estimations, unveiled at the negotiations.   

„We anticipate that the inflation will remain within the limits of the interval targeted by the National Bank of Moldova (BNM), about 5 per cent. We expect the programme to support the economic improvement, facilitate the foreign financing and create a strong foundation for a sustainable and inclusive long-term economic growth,’’ the PM said.      

Ion Chicu stressed that, according to the financial component and the spectrum of reforms included, this programme is the biggest and most ambitious one ever signed between Moldova and IMF. The programme has a financial component of about 558 million dollars, 85 per cent of which will be used for budgetary support and only a small sum will go for completing BNM’s currency reserves.  

„The programme is unprecedented also under the aspect of fields regarded by reforms, with the main chapters being: budgetary and fiscal, supervising the financial sector, BNM’s governance, market regulation and improvement of the business environment, energy sector, rule of law state, combating the money laundering and financing terrorism,’’ the official said.   

In another context, the prime minister noted that any programme with IMF implied a huge work on behalf of the government, as well as a responsible attitude on behalf of the political forces. ‘’Therefore, on behalf of the colleagues from the government, National Bank, other state’s structures,  I call on the responsible political parties to provide every support for the implementation of this ambitious programme of reforms,’’ the PM added.

This agreement between the government, BNM and IMF is to be approved by the Fund’s Board of Directors in next autumn and there are also preliminary actions which must be fulfilled by the cabinet, parliament and BNM.   

On 7-24 July an experts’ team of the International Monetary Fund, led by Ruben Atoyan, held online discussions from the Fund’s headquarters in Washington with Moldova’s authorities on an economic programme supported by IMF. The IMF Mission and Moldova’s authorities have reached an expert-level agreement on the programme of economic reforms, which will be supported through a three-year agreement, financed based on the Extended Credit Facility (ECF) and Extended Fund Facility. Thus, Moldova will get access to financial assistance worth about 558 million dollars.