IMF mission considers as promising Moldova's perspectives of getting significant economic growth in 2008

The mission of the International Monetary Fund (IMF), which was in Moldova from May 7 to 20, considers as promising the perspectives of Moldova's attaining a significant economic growth in 2008 . Such statements were made a news conference on Tuesday, May 20, by chief of the mission Graeme Justice. The IMF official has said this year the climate conditions seem favorable and, if the harvest is good, the economic growth will record 6-7 per cent, or perhaps more, Info-Prim Neo reports. Graeme Justice has said late an enhanced interest on behalf of foreign investors for Moldova is noticed. Many of them address the Chisinau office of the IMF for information and recommendations. The investors especially show interest for the services and agricultural sectors. “The investments will grow. And it's a positive thing. On the other hand, the growth of investments implies a growth of the capital's flow into the country. We all see however how the national coin has appreciated for the last months. Yet in real terms Moldova will anyway remain competitive in this regard compared with the neighboring states,” said Graeme Justice. The IMF official repeated the inflation remained the IMF's main concern, as the prices of of food and energy rise rapidly. In the opinion of Graeme Justice, it is important to realize the inflation remains a monetary phenomenon. Even though no attention was paid to prices of food and energy resources, conditioned by the situation on world markets, the inflation in Moldova is high and grows every month. This is explained by the country confronting with the rise of the demand on the local market. As in other countries in transition, the growth of the capital from abroad is large, as well as the growth of the expectations regarding the prospects of the state's development. The latest sign of these expectations is the rise of the current account deficit to 17% of the GDP in 2007. “The forecast to maintain the inflation in 2008 to the one-digit level does not seem optimistic, yet this is not impossible. We have discussed with the Government about some measures adequate to hold in the inflation. We have agreed with the National Bank to hire a permanent advisor to assist them in decreasing the pace of the growth of the money offer,” the mission chief has stated. These aspects are mirrored in the updated Memorandum on Economic and Financial Policies for the last months of 2008, agreed with the Government. It is to be considered by the IMF Board and Moldova may then get a new tranche of USD18 million in July. It is two years since Moldova signed the program with the IMF supported through the Poverty Reduction and Growth Facility. The IMF loan for this program is USD174 million, from which has already got USD124 million. The program expires on April 1, 2009.