The IMF Executive Board concluded the first reviews 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 20.65 million (about US$ 27 million). The money will be used to do essential reforms to increase the country’s resilience and to cover socio-economic costs, IPN reports, quoting the Government’s press service.

According to the IMF, the impact of the war in Ukraine has yet to fully materialize, with the economy projected to stagnate in 2022 amid spillovers from the war, rising food and energy costs, and fragile confidence. Moldova’s program is advancing governance reforms critical to increasing the country’s resilience to shocks, while also providing additional resources to meet urgent socio-economic needs.

The Executive Board welcomed the successful completion by the Moldovan authorities of structural commitments on fiscal governance, financial sector oversight, and on strengthening anti-corruption legislation.

“Maintaining this strong policy momentum will be critical to secure additional grant and concessional financing from donors needed to finance one-off spending pressures, retain adequate fiscal buffers, and reduce reliance on short-term domestic financing. Continued reform implementation and contingency planning will also help Moldova create a solid foundation for strong and inclusive growth,” said the Board.

It noted that strengthening financial supervision and regulation also remains important, especially given vulnerabilities to the non-bank sector.