Mitsuhiro Furusawa, IMF Deputy Managing Director and Acting Chair, said Moldova’s economic outlook has deteriorated sharply due to the COVID-19 pandemic. Real GDP is expected to fall and public finances are under significant pressure from declining tax revenues and emergency health and social spending. The statement was made following the discussion of the Executive Board of the International Monetary Fund that approved a disbursement of about US$ 235 million to help Moldova contain the COVID-19 pandemic, IPN reports.
In a press release, the IMF says the economic impact of the COVID-19 pandemic remains highly uncertain with risks heavily tilted to the downside. The IMF support will help finance the health and macroeconomic stabilization measures, catalyze donor support, and shore up confidence in Moldova.
The Executive Board of the International Monetary Fund approved a disbursement under the Rapid Credit Facility (RCF) equivalent to SDR 57.5 million (about US$78.4 million, 33.3 percent of quota) and a purchase under the Rapid Financing Instrument (RFI) equivalent to SDR 115 million (about US$156.7 million, 66.7 percent of quota) to meet Moldova’s urgent balance of payment needs stemming from the COVID-19 pandemic.
“The authorities responded quickly and comprehensively, including a national state of emergency, a travel ban, and a range of fiscal and prudential measures. The National Bank of Moldova has been ensuring orderly exchange rate adjustment and liquidity provision. These measures should help contain the spread of the virus, support the health and social systems, and protect employment and viable businesses, while preserving macroeconomic and financial stability.
“While downside risks have intensified, public debt remains sustainable with low risk of distress. Beyond the immediate response, the authorities have reinforced their commitment to engage in a governance-focused arrangement with the Fund in the coming months. The IMF stands ready to support Moldova in addressing its immediate and medium-term policy challenges,” said Mitsuhiro Furusawa.
