IMF gives good appreciation to the policies promoted by Moldovan authorities and promises to increase support

The board of the International Monetary Fund (IMF) appreciated the performances of Moldova and approved disbursing USD 48.2 mln and increasing the financial support within the frameworks of the agreement signed by the parties. The statement was made by the deputy Managing Director of IMF, Takatoshi Kato on the occasion of the end of the estimation related to Moldova’s programme on the economic reforms and poverty reduction within the agreement referring to its financing mechanism (PRGF). î According to a press release of the IMF, cited by Info-Prim Neo, the official said that “Moldova's performance during the first six months of its PRGF-supported program has been encouraging, despite sharp increases in natural gas import prices and disruptions in wine exports to traditional markets, which have slowed growth, fueled inflation, and posed risks to the banking system. The authorities are to be commended for maintaining macroeconomic stability and strong momentum for needed reforms in the face of these external shocks”. Also, the deputy Managing Director of IMF stated that “the authorities have already made commendable efforts to quickly adjust to the new external environment. They have passed through higher energy prices to consumers while seeking ways to compensate the poor. Prudent fiscal policy is helping to tame inflation while preserving social and infrastructure spending. A more consistent stance of monetary policy will be crucial to ease inflationary pressures. Continued exchange rate flexibility, complemented by measures to reduce administrative barriers and strengthen governance, will help enhance competitiveness. Good progress has been achieved in regulatory and public administration reforms. Elimination of the Council of Creditors and restrictions on grain exports are particularly welcome steps”. “The structural reform agenda for 2007 will continue to focus on improving the business climate and promoting private sector-led growth. Public administration and regulatory reforms will clarify and reduce the role of the state in the economy. This will be coupled with the accelerated privatization process and more effective bankruptcy procedures. The financial sector will be strengthened by improving transparency and competition, including through the increased presence of foreign capital in the Moldovan banking sector, and the establishment of a consolidated supervisory body for non-bank financial institutions”, Takatoshi Kato said.