IMF Staff Reach Staff-Level Agreement with Moldova

Chisinau, 17 October /MOLDPRES/ - IMF staff and Moldova’s  authorities have reached staff-level agreements on policies for completion of the fourth review under the Extended Credit Facility and Extended Fund Facility (ECF/EFF) arrangements and on a new Resilience and Sustainability Facility (RSF) arrangement. 

The decision was announced, after an IMF mission, led by Clara Mira, conducted discussions in Chisinau and online with Moldova’s authorities during September 25-October 16. According to the IMF,  Completing the review will make SDR 70.95 million (about $92 million) available, bringing total disbursements under the program to about $461.3 million.

„Program implementation remains generally strong, despite challenging circumstances. The authorities met all end-June quantitative performance criteria. Structural reforms are also advancing, including in fiscal governance and financial sector oversight. Work is ongoing to strengthen the framework of anti-corruption institutions, including ensuring that the Anti-corruption Prosecution Office has jurisdiction over high-level officials for all corruption-related crimes and is granted sufficient powers and capacity, and by establishing an Anti-Corruption Court,’’ Clara Mira said.

“Spillovers from Russia’s protracted war in Ukraine continue to affect the economy, although a deceleration of inflation and improvement in energy security have mitigated the cost-of-living crisis,’’ the IMF official stressed.  

According to IMF, inflation has decelerated faster than expected, driven by the National Bank’s (NBM) well-calibrated monetary policy and a sharp decline in food and fuel prices. The Fund’s representative also said that, following contraction in 2022, growth remained negative in the first half of 2023.  

„However, a modest recovery is expected in 2023, with growth projected at 2 percent. The recovery is expected to gain traction in 2024, with improvements in agricultural production, consumption, and investment. The outlook remains highly uncertain, with significant downside risks. Escalation of the war and renewed energy shocks could aggravate prospects going forward. However, progress in EU accession, a faster recovery in domestic demand or in trading partners could boost growth and confidence,’’ Clara Mira noted.

The official specified that the Moldovan authorities should continue to prepare contingency plans, protect the vulnerable, and prioritize infrastructure investment. 

‘’A 22-month RSF arrangement of SDR 129.375 million (about $169 million) is expected to support the authorities in advancing their ambitious agenda to address climate challenges.’’  

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