Moldova, IMF reach agreement on third evaluation of programme

Chisinau, 27 March /MOLDPRES/ – The authorities of Moldova and experts of the International Monetary Fund (IMF) reached a staff agreement on the third evaluation of the programme, announced today in a joint briefing by Prime Minister, Pavel Filip, and Head of Mission, Ben Kelmanson.

The IMF expert team led by Ben Kelmanson completed the working visit to Chisinau, during which the mission held talks with the authorities in the context of the third evaluation of the IMF-supported Programme through ECF (Extended Credit Facility) funding mechanisms and EFF (Extended Fund Facility). Over two weeks the mission analised recent developments in Moldova and progress in implementing the programme of authorities.

"We, the ones from the Government, maintain determination to step up our activities and complete all reforms under process to make them irreversible. The conclusions of the mission are satisfactory, staff agreement has been reached on all issues discussed," said Prime Minister, Pavel Filip, at briefing. The PM said that "there are welcome findings on overall fulfillment of all performance criteria set for the assessed period".

"The budgetary – fiscal policy, promoted by authorities in 2018, remains hand in hand with objectives under contribution of the Programme in promoting measures to further boost economic growth," said the head of Executive. He referred in the context of economic growth of 4.5 per cent in 2017, recording progress in eliminating vulnerabilities within financial and banking sectors. "We will be able to benefit $34.9 million additionally, following completion of programme review stage," said Premier.

It will be made budget revisions for 2018, in the next period, while respecting the existing deficit ceiling, tax and customs reforms will continue to ensure higher budget revenues. The Government is committed to elaborating mid – term budgetary framework for 2019 – 2021 by June 2018, assess more prudently spending, especially in education. "We will continue with efforts to rehabilitate financial – banking system. We will develop a strategy for recovery of fraudulent means, based also upon Kroll company’s investigations," said Prime Minister, Pavel Filip.

The chief of IMF mission, Ben Kelmanson, announced that a staff agreement was reached with Moldovan authorities, which would be approved by IMF management and the board of directors. As a result, Moldova could access a new tranche on behalf of IMF. Until then, authorities of Moldova have to carry out a number of prior actions.

The three-year programme of Moldovan authorities, supported by IMF, was approved on 07 November 2016. It is funded by a total loan of 129.4 million Special Drawing Rights (SDRs), equivalent to about $187 million, out of which $83 million were already allocated. Two-thirds of the amount of loan is granted under ECF, which provides for an interest rate equal to zero by the end of 2018, a grace period of five and a half years and a repayment term of 10 years. The rest of the loan is granted under EFF, providing an annual interest rate equal to the SDR interest rate (currently 1.8 per cent), a 10 – year repayment period and a grace period four and a half years.

(Reporter V. Bercu, editor M. Jantovan)