Communist MPs: “Economic situation in Moldova has worsened. It's strange that IMF experts did not see it”

The Communist Opposition denies the economic recovery announced by the Government and expresses its bewilderment at the related findings of the IMF mission that had worked in Chisinau of two weeks, According to the Communist lawmakers Zinaida Greceanyi, former Premier of Moldova, and Igor Dodon, former Minister of the Economy and Trade, the economic growth of 12% forecast by the Government for the first quarter of 2010 will be of only 1%, Info-Prim Neo reports. In a news conference on May 17, Zinaida Greceany said the growing revenues to the budget are due to the artificial depreciation of the national currency, the higher taxes and excise duties from January 1, 2010, the transfer of the accounting income from the National Bank of Moldova to the budget, the money coming from foreign grants. All these factors, according to Zinaida Greceany, helped collect about 1 billion lei in the budget over the first four months of the year. The Opposition is concerned about the budget deficit for the first four months, which is 635 million lei, while the budget deficit approved for 2010 is 4 billion lei. “We return to the situations from the end of the 1990s, when the Government obtained money from abroad after announcing the initiation of reforms, but used it not to implement investment programs, but for consumption. If things go on like this, the situation in our county will be as in Greece or Romania, where the salaries and pensions have been cut,” Zinaida Greceanyi said. The former Premier said that Moldova's foreign debt for January-April 2010 was about 990 million lei and if it represents 50% of the GDP during the next few years, the country will experience a default. “The economic situation has worsened. It's strange that the IMF experts did not see it,” said Igor Dodon. “We are not against obtaining money from abroad, but it should be invested, not used.” A recent IMF staff mission and the Moldovan authorities have reached a staff-level agreement, subject to approval by the IMF Management and Executive Board, on the completion of the first review of the Extended Credit Facility/Extended Fund Facility arrangements. Completion will allow Moldova to draw SDR 60 million (about US$89 million) to support its budget and the external reserve position. The mission's head Nikolay Gueorguiev said that despite these welcome trends, the economy faces a number of challenges. Under the economic program between the IMF and Moldova for 2010-2012, Moldova will obtain a loan of US$574.4 million repayable in ten years, at an annual interest rate of 0.25%.