IMF approved disbursement of 79.8 million dollars for Moldova

Chisinau, 21 Dec. / MOLDPRES /- The Executive Board of the International Monetary Fund (IMF) today approved the request of the Moldovan authorities to support the program of economic reforms through the Extended Lending Mechanism and the Extended Financing Mechanism. Following the approval of this request, $ 79.8 million will be disbursed, and the total amount of disbursements under the 40-month program, concluded with our country, supported by the two mechanisms, will be $ 558.3 million.

The IMF's Board also approved today the report on the consultations with the Republic of Moldova provided for in Article IV of the IMF Statute for 2021.

Kenji Okamura, deputy director of the IMF and chairman of the meeting, said that "the Moldovan authorities have made commendable progress in rehabilitating the banking sector and strengthening macro-financial stability."

"However, the COVID-19 pandemic, the 2020 drought and the continuing rise in global energy prices have slowed economic activity, intensified the risks of declining economic growth and complicated policy making. Although emergency financial assistance from international partners has helped mitigate the economic impact of the pandemic, Moldova remains one of the poorest countries in Europe, with persistent structural and governance vulnerabilities that inhibit revenue convergence, "said Kenji Okamura.

In this context, the program supported by the IMF through the Extended Lending Mechanism and the Extended Financing Mechanism has three main objectives: firstly, to support post-pandemic recovery, secondly, to meet urgent development needs and, thirdly, to strengthen the institutional framework and the governance framework of the Republic of Moldova.

According to the IMF official, as economic activity recovers, the set of policies will have to evolve so as to ensure the achievement of Moldova's stringent development goals, including focusing on significant infrastructure needs, as well as to accelerate convergence of revenues with other comparable European countries, without jeopardizing the sustainability of government debt.

"With regard to fiscal policy, in order to have a better execution of the budget and to promote a more receptive and impactful fiscal policy, it will be vital to ensure a better mobilization of revenues at home. , greater efficiency in public spending, firm elimination of budgetary risks posed by state-owned enterprises and continued efforts to increase the quality and transparency of the budget. and to ensure access to the necessary concessional financing ", according to the quoted source.

"The ambitious reforms of the authorities focus on addressing the persistent deficiencies of a long time and present on several fronts, related to governance, as well as the institutional vulnerabilities of the Republic of Moldova. We expect the proposed measures - provided they are properly ordered and firmly implemented - to produce serious results in the medium term, unlocking Moldova's untapped economic potential and accelerating the convergence of the country's revenues with those of other comparable European countries. Strong efforts to promote reforms to strengthen the rule of law, reduce corruption and ensure the independence of key institutions will be key to improving the business environment, stimulating competition and innovation, unlocking private investment, slowing the exodus of skilled staff, accelerating human capital accumulation and increasing productivity, "Kenji Okamura summed up.

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