An International Monetary Fund (IMF) mission led by Ben Kelmanson held
discussions with the Moldovan authorities on the first review under an
IMF-supported economic program in Chisinau from February 14-28, 2017. At
the conclusion of the mission, Mr. Kelmanson made the following statement
today in Chisinau:
“IMF staff and the Moldovan authorities have reached staff-level agreement
on the first review under an economic reform program supported by a
three-year
Extended Credit Facility and Extended Fund Facility (ECF/EFF)
arrangement. The staff-level agreement is subject to approval by IMF Management and
the Executive Board. Consideration by the Executive Board is expected in
April, following the authorities’ implementation of a number of prior
actions. Completion of the review will make available SDR 15.7 million
(about US$21.2 million).
“The Moldovan authorities have continued to make progress in tackling
long-standing vulnerabilities in the financial sector and advancing
structural reforms. These efforts have helped to restore financial
stability, and growth has started to return. The economy is projected to
grow by 4.5 percent in 2017, higher than earlier expected. Continuing
steadfast efforts to rehabilitate the financial system, including
strengthening the governance and financial condition of banks, and
enhancing regulatory and supervisory frameworks are vital to sustain growth
and job creation.
“Monetary policy continues to be focused on maintaining price stability in
the context of a flexible exchange rate regime. To this end, the National
Bank of Moldova should continue to improve its inflation targeting
framework by strengthening operational procedures, forecasting abilities,
and policy communications. The NBM should also stand ready to tighten
monetary policy if inflation rises more quickly than projected.
“The 2017 budget and the medium-term budget framework are consistent with
program targets and support growth-friendly measures. Key actions ahead
include strengthening revenues, improving the efficiency of spending, and
effective public administration reform. Resources made available from these
efforts should be directed toward capital expenditure and targeted social
spending. In addition, fiscal structural reforms should aim to further
strengthening the fiscal framework.
“The authorities continue to work on eliminating accumulated debt by energy
companies and improving tariff-setting methodology, to ensure transparency
and cost-recovery. They are currently assessing their poverty reduction
strategy with the objective of updating it and aligning it with the UN
Sustainable Development Goals.”
