IMF staff and the Moldovan authorities have reached staff-level agreement on the third review under an economic reform program supported by a three-year Extended Credit Facility and Extended Fund Facility (ECF/EFF) arrangement. The staff-level agreement is subject to approval by IMF Management and the Executive Board. Consideration by the Executive Board could happen as early as May, following the authorities’ implementation of a number of prior actions. Completion of the review will make available SDR 24.0 million (about US$34.9 million), IPN reports.
Prime Ministr Pavel Filip, in a press beefing held together with the head of the IMF mission Ben Kelmanson, said a list of priorities was agreed to more efficiently spend the external financing. The executive will make sure that the 2018 state budget and medium-term budgetary framework are adjusted in optimal terms and that the 2019 state budget law is approved by the end of the current session of Parliament. “The way in which the relations with the IMF develop influence also the relations with the other development partners. We are decided to implement the whole reform agenda. We are glad to have positive results, such as the economic growth of 4.5% in 2017 and the rise in investments in the country’s economy,” stated the Premier.
For his part, the IMF official said the Moldovan authorities continue to make progress in strengthening economic policies and addressing vulnerabilities in the banking sector. “These efforts have helped preserve financial stability and strengthen the foundation for medium-term. Economic growth was strong in 2017, supported by robust domestic demand and a favorable external environment. These are expected to continue in 2018, and growth is projected to remain solid, at 3.8 percent. Sustained and determined efforts to rehabilitate the financial system – including by strengthening the governance and financial condition of banks, and enhancing regulatory and supervisory frameworks – are vital to maintaining financial stability, sustaining growth and job creation,” stated Ben Kelmanson.
An International Monetary Fund mission led by Ben Kelmanson visited Chisinau from March 15-27, 2018 and held discussions with the Moldovan authorities on the third review under an IMF-supported economic program. Moldova’s three-year IMF program, approved on November 7, 2016, is supported by a loan of SDR 129.4 million (about US$187 million, or about ¾ of the Republic of Moldova’s quota), of which SDR 57.4 million (about US$83 million) have been already disbursed.
Two thirds of the loan are provided under the Extended Credit Facility, which carries a zero interest rate through 2018, a grace period of 5½ years, and a 10-year maturity. The rest of the loan is provided under the Extended Fund Facility, which carries an annual interest rate equal to the SDR basic rate of charge (currently 1.8 percent), and is repayable over 10 years with a 4½ -year grace period.
