IMF Mission ascertained that Moldova needs supplementary foreign financial assistance

Moldova has chances to benefit of supplementary foreign financial assistance from foreign donors, including the International Monetary Fund (IMF) the head of the IMF Mission, Thomas Richardson declared on the occasion of ending his visit in Moldova. Richardson mentioned that it is possible that IMF’s volume of financing to increase. This possibility will be discussed with the leadership of the Fund. “We consider that it would be an opportunity for the community of donors, including bilateral donors and EU to offer more assistance to the Republic of Moldova”, the official declared. In the context of economic problems of Moldova linked to the interdiction of wine exports to Russia as well as to the increase in price of the natural gas, Thomas Richardson said that it is a situation that will show who are the true friends of Moldova. Although Moldova will be forced “to tighten its belt”, Richardson said that IMF will find ways of helping Moldova overcome this crisis, because IMF was created to help countries cope with negative economic phenomena. The visit of IMF Mission in Moldova aimed at evaluating the situation and recent economic events. The economic program signed between IMF and Moldova includes regular evaluations, every 6 months. In October, a new mission of the Fund will pay a visit to Moldova in order to make the first official assessment of the implementation of the program signed with IMF. As well in October, discussions on the economic reform for 2007, which could be supported by IMF, will start. In December the next installment for Moldova could be drawn, the official said. Richardson expressed his satisfaction with the way the structural economic reforms are progressing, including the actions undertaken in order to increase the independence of the National Bank of Moldova, performing regulatory reforms, initiating actions for the modernization of the fiscal administration system etc. “The structural reforms that will be implemented by Moldova are very important for the economic growth and poverty fighting. Referring to the increase in price of natural gas, Richardson said that the recommendation for Moldova as well as for other states confronting with price increases for energetic resources: to transfer the increased tariff for natural gas to the final consumers and at the same time to offer compensations for the most vulnerable categories of population. Solicited to mention the areas where the supplementary financial resources offered by foreign donors will be directed, the deputy prime-minister, Zinaida Grecianii, present at the press conference, declared that all the resources offered by IMF will be used for supporting the national currency and the currency reserves. Additional resources that might come especially from EU or other donors will be directed to investment and infrastructure programs, especially to the roadways area, Grecianii said. In the context of supporting the local producers affected by the Russian bans on wine and the increase of natural gas, Grecianii said that the resources of IMF that will be directed to supporting the national currency will influence the financial market because the crediting by the Moldovan banking system will become more attractive. “These are interdependent elements and if the Government invests in infrastructure it creates conditions for the business activity”. IMF Mission, headed by Thomas Richardson stayed in Chisinau during July 12-21. The Mission discussed with Moldovan authorities about the recent economic evolutions, including the achievements within the new PRGF program. IMF Program for Moldova was approved at the begging of May 2006 for a period of 3 years, amounting to USD 118.2 million. The Document was approved on the base of the Mechanism for the Economic Growth and Poverty Reduction Paper (EGPRSP) and will be directed towards implementing it objectives.