IMF Staff Country Reports

This paper discusses Republic of Moldova’s Second Reviews under the Extended Credit Facility and Extended Fund Facility Arrangements, and Request for Waiver of Applicability for Performance Criteria. Spillovers from Russia’s invasion of Ukraine continue to weigh heavily on Moldova, with disruptions of energy supply putting additional pressure on the Moldovan economy. The IMF-supported program has helped catalyze significant external financing to help Moldova bridge immediate financing needs. As risks remain high and the outlook is subject to extreme uncertainty, maintaining a strong policy momentum will be critical to secure additional grant and concessional financing from donors, needed to withstand the shocks, reduce reliance on expensive short-term domestic financing, and preserve fiscal sustainability. The authorities’ near-term policy priorities are appropriately focused on safeguarding energy security, protecting the most vulnerable from the cost-of-living crisis, and preserving macrofinancial stability. Going forward, maintaining an appropriate policy mix will be critical to withstand downside risks, should they materialize, while pursuing longer term developmental objectives.