The Executive Board of the International Monetary Fund (IMF) concluded the fourth review under the Extended Credit Facility (ECF) and Extended Fund Facility (EFF) arrangements for the Republic of Moldova. This allows for the immediate disbursement of SDR 70.95 million (about US$ 95 million). According to the IMF, ECF/EFF implementation remains strong, with key reforms in fiscal governance, financial sector oversight, and the rule of law, IPN reports.
The Executive Board also approved a new arrangement Under the Resilience and Sustainability Facility (RSF) of SDR 129.375 million (about US$173 million). The RSF will support Moldova’s efforts to strengthen resilience against climate shocks, support energy sector reforms, enhance domestic financial sector preparedness, and mobilize sustainable finance.
Following the Executive Board’s discussion, Kenji Okamura, IMF Deputy Managing Director, said that performance under the ECF/EFF remains strong, despite the complex environment. “Inflation decelerated more rapidly than expected, owing to a well-calibrated monetary policy response and a swift decline in food and fuel prices. The rebound is projected to be modest in the near term supported by a pickup in domestic demand,” noted Kenji Okamura.
The IMF said fiscal policy should remain focused on mitigating the impact of the multiple crises, supporting the recovery, and advancing longer-term reforms. Near-term policy should continue to support the most vulnerable and safeguard energy security. Over the medium term, fiscal consolidation, while addressing development needs, is important to preserve fiscal and debt sustainability.
Executive Directors agreed with the thrust of the staff appraisal. They commended the authorities for their strong program ownership and performance under the ECF/EFF arrangements and considered that the new RSF arrangement will help strengthen climate resilience efforts. Directors cautioned that despite the favorable outlook, Moldova continues to face significant headwinds from multiple crises and large downside risks, including from spillovers from Russia’s war in Ukraine and energy shocks. They encouraged continued focus on mitigating shocks, aiding the recovery, and supporting sustainable, green growth, and EU accession efforts.
At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country’s authorities.
