The money from the IMF, the European macro-financial assistance and the loan from the World Bank are external resources on which the Government banks for covering the enormous budget deficit created this year, of over 20 billion lei. Minister of Finance Dumitru Budeanschi said the representatives of the Government agreed with the IMF experts to review the agreement and to increase the initially agreed sum by US$120 million. For its part, the parliamentary opposition is skeptical about the Government’s capacity to obtain foreign loans and says that the Executive for now has only borrowed money from the domestic market, IPN reports.
The minister admitted that the revenues in 2022 are smaller than it was projected at the end of last year. However, the Government’s priority is to maintain the assistance programs intended for the people and to preserve their purchasing power. Therefore, the state will borrow money from the development partners so as to cope with the rising costs and smaller incomes.
“The state budget revenues will be lower. We anticipate the economic growth will be close to 0%. However, it is extremely important not to reduce the costs. If we cut now all the costs, the losses in the economy will be much larger than if we borrow now to ensure social and fiscal stability. As part of the program with the IMF, we will get US$120 million more immediately after we sign the agreement, in May I think. We will also receive macro-financial assistance that was already approved. We are working with the EU to get additional funds. The World Bank expressed its readiness to increase the earlier agreed loan,” Dumitru Budianschi stated in the program “Thursday with Liliana Barbăroșie” on the public TV channel.
At the same time, the parliamentary opposition said the foreign financial institutions could refuse to lend money to Moldova amid the global economic crisis.
“We will yet see if those who promised will offer loans to us. The crisis embraced the whole Europe. The price of gas is high. We are not sure that these loans will come in the current conditions. For now, we only see that the Government borrows money from the internal market at a high interest rate of 14%. This is a lot,” said MP of the Bloc of Communists and Socialists Ala Darovanaya.
The European Parliament last week approved €150 million in macro-financial assistance for the Republic of Moldova. The €120 million in loans and €30 million in grants will be paid out in three installments until 2024.
