Moldova’s economy continues its vigorous recovery, IMF

The IMF mission and the Moldovan authorities have reached a staff-level agreement on the completion of the third review under the ECF/EFF arrangements. The agreement is subject to approval by IMF Management and the Executive Board. Board consideration is expected in early July. Completion of the review will enable Moldova to draw SDR50 million (about US$77 million) in support of its external reserve position. A number of reforms are to be implemented in Moldova under the agreement from January 1, 2011. They include specific reforms aimed at raising the efficiency of the public sector, improving tax collection, ending accumulation of arrears in the energy sector, improving the business environment, and removing barriers on external trade. Related statements were made in a news conference held jointly by Prime Minister Vlad Filat and the head of the IMF mission for the third review under the Extended Credit Facility/Extended Fund Facility (ECF/EFF) arrangements with Moldova Nikolay Guerduiev, Info-Prim Neo reports, quoting a communiqué from the Government. “Moldova’s economy continues its vigorous recovery with key indicators of economic activity posting strong gains so far this year. Inflation has been declining, but may face upward pressures from the recent spike in international energy prices and accelerating domestic demand. In 2011-12, we expect a strong economic growth rate of 5 percent; some widening of the external current account deficit; and inflation of 8 percent in 2011 and 5¾ percent by end-2012,” said Nikolay Guerduiev. “Mid-way through its IMF-supported program, Moldova has largely overcome the economic crisis. Helped by the credible stabilization program, significant liberalization efforts, and improved external environment, output already reached its pre-crisis level, the National Bank of Moldova (NBM) rebuilt its international reserves, and the budget deficit was reduced by over 3¾ percent of GDP last year while funds for social assistance increased considerably. Nevertheless, a lot remains to be done. The immediate policy priorities are to maintain macroeconomic stability, continue on the path of fiscal adjustment, and accelerate structural reforms aimed at promoting competitiveness and export-led growth.”