The state debt at the end of last year was 21.2 billion lei, 15 billion lei of which (about US$1.2 billion) represented the foreign debt, IPN reports, quoting an Audit Office report. Minister of Finance Veaceslav Negruta said that in nominal terms the debt will increase slightly this year, but in real terms, in relation to the GDP, will diminish to some extent.
“It is a good trend as, even if Moldova takes out new loans, the indebtedness level decreases. This means that the borrowed money is invested and works for the national economy and for the GDP growth. We must step up the initiated reforms and strengthen our credibility before the potential donors. We must show that we can put the offered money to good use,” Veaceslav Negruta said during the presentation of the Audit Office report.
On the other hand, the audit report reveals a low level of utilization of the borrowed foreign resources and that a number of tranches from foreign loans were cancelled because the loan recipients didn’t meet certain contractual conditions. According to the situation on December 31, 2012, tranches were canceled in 20 loans of the 92 taken out. In 2012, there were cancelled parts of the loan obtained from the World Bank for the Energy Project II, additional financing to it, and for the Rural Investment and Services Project II.
The Audit Office identified irregularities on the repayment of foreign loans by five companies with majority state capital. The local public authorities also do not respect the loan repayment procedures, especially on the loans taken out for capital costs (7 of the 17 recipients examined by the auditing team).
Under the report, the public debt, consisting of the state debt and the debt of the National Bank of Moldova, last yearend was over 29 billion lei, an increase of 4.1 billion lei on 2011. 73% represent the state debt, 19.4% - the debt of the National Bank, 6.6% - the debt of companies from the public sector, while the rest was the debt of certain territorial-administrative units.
The public debt represented 33% of the GDP, up 3.8% on a year before.
