{
  "title": "IMF Executive Board Concludes Second Reviews Under the Extended Credit Facility and Extended Fund Facility Arrangements for the Republic of Moldova",
  "publication": "IMF News, January 9, 2023",
  "sourceUrl": "https://www.imf.org/en/news/articles/2023/01/09/pr2301-imf-executive-board-concludes-second-reviews-under-ecf-and-eff-for-moldova",
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  "summary": "IMF ECF, EFF for the Republic of Moldova",
  "publishDate": "2023-01-09",
  "sections": [
    {
      "heading": "Key outcomes and financing",
      "content": "- The Executive Board completed the second review under the 40-month Extended Credit Facility (ECF) and Extended Fund Facility (EFF) arrangements for the Republic of Moldova.\n- Immediate disbursement: SDR 20.65 million (about US$27 million), usable for budget support.\n- Total disbursements under the blended ECF/EFF arrangements after this review: SDR 206.6 million (about US$275 million).\n- Original/augmented access under the arrangements: total access increased to SDR 594.26 million (as noted in the arrangements’ augmentation)."
    },
    {
      "heading": "Macro outlook and risks",
      "content": "- 2022 GDP projection: economy is projected to contract by 1.5 percent in 2022.\n- 2023 GDP projection: modest recovery of 1.5 percent in 2023.\n- Inflation: estimated to have peaked but remains high at 31.4 percent in November (year-on-year).\n- Fiscal position: fiscal deficit is projected to widen to 6 percent of GDP next year, reflecting policies to counter the cost-of-living and energy crises.\n- External sector: current account deficit continues to be driven by higher costs of energy imports.\n- Risk assessment: risks to the outlook are high and firmly tilted to the downside, including risks of further escalation of Russia’s war against Ukraine.\n- Shock drivers: spillovers from Russia’s invasion of Ukraine continue to weigh heavily on Moldova, with disruptions of energy supply putting additional pressure on the economy."
    },
    {
      "heading": "Program implementation and reforms",
      "content": "- Program performance: Moldova’s program implementation remains strong despite the difficult environment.\n- Completed structural commitments: public investment management, SOE sector reforms, and financial sector governance.\n- Strengthening of reform agenda: proposal of six new structural benchmarks to guide implementation of reform priorities.\n- External financing: the Fund-supported program has helped catalyze significant external financing to help Moldova bridge immediate financing needs."
    },
    {
      "heading": "Policy priorities and recommendations (authorities’ near-term focus and Fund guidance)",
      "content": "- Near-term policy priorities:\n  - Safeguarding energy security.\n  - Protecting the most vulnerable from the cost-of-living crisis.\n  - Preserving macro-financial stability.\n- Fiscal policy guidance:\n  - Maintain strong policy momentum 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.\n  - Improve spending efficiency, foster budget credibility, and mobilize domestic revenue.\n- SOE sector and governance:\n  - Accelerate SOE sector reform to improve efficiency and contain fiscal risks.\n  - Continue broader governance, judicial and anti-corruption reforms to support growth.\n- Monetary policy and central bank governance:\n  - Revised inflation outlook warrants carefully calibrated easing of monetary policy stance, but exceptionally high uncertainty calls for continued vigilance.\n  - Adoption of the law aiming to strengthen the institutional autonomy and governance of the National Bank of Moldova (NBM) is welcome.\n  - Safeguarding the independence of the NBM is essential to reinforce its credibility and strengthen policy effectiveness."
    },
    {
      "heading": "Assessment of program role and outlook",
      "content": "- The program has helped the authorities respond to multiple shocks in an agile and comprehensive way.\n- Continued progress on governance reforms helps foster resilience and creates a solid foundation for strong and inclusive growth.\n- Continued reform implementation and maintenance of an appropriate policy mix are critical to withstand downside risks while pursuing longer-term developmental objectives.\n\nPress Release No. 23/01 — IMF Communications Department, January 9, 2023.\n\n---\n\n Content in this bundle\n\n- Pr2301 Rom\n  - Pr2301 Rom (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Pr2301 Rom (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- Kenji Okamura\n- Republic of Moldova and the IMF\n- Special Drawing Rights (SDRs) -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- Press Release\n- Press Release\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2023/01/09/pr2301-imf-executive-board-concludes-second-reviews-under-ecf-and-eff-for-moldova"
    }
  ],
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    "[Markdown version](/en/news/articles/2023/01/09/pr2301-imf-executive-board-concludes-second-reviews-under-ecf-and-eff-for-moldova/index.md)",
    "[Structured JSON version](/en/news/articles/2023/01/09/pr2301-imf-executive-board-concludes-second-reviews-under-ecf-and-eff-for-moldova/index.json)",
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    "Published: January 9, 2023",
    "The Executive Board completed the second review under the 40-month Extended Credit Facility (ECF) and Extended Fund Facility (EFF) arrangements for the Republic of Moldova.",
    "Immediate disbursement: SDR 20.65 million (about US$27 million), usable for budget support.",
    "Total disbursements under the blended ECF/EFF arrangements after this review: SDR 206.6 million (about US$275 million).",
    "Original/augmented access under the arrangements: total access increased to SDR 594.26 million (as noted in the arrangements’ augmentation).",
    "2022 GDP projection: economy is projected to contract by 1.5 percent in 2022.",
    "2023 GDP projection: modest recovery of 1.5 percent in 2023.",
    "Inflation: estimated to have peaked but remains high at 31.4 percent in November (year-on-year).",
    "Fiscal position: fiscal deficit is projected to widen to 6 percent of GDP next year, reflecting policies to counter the cost-of-living and energy crises.",
    "External sector: current account deficit continues to be driven by higher costs of energy imports.",
    "Risk assessment: risks to the outlook are high and firmly tilted to the downside, including risks of further escalation of Russia’s war against Ukraine.",
    "Shock drivers: spillovers from Russia’s invasion of Ukraine continue to weigh heavily on Moldova, with disruptions of energy supply putting additional pressure on the economy.",
    "Program performance: Moldova’s program implementation remains strong despite the difficult environment.",
    "Completed structural commitments: public investment management, SOE sector reforms, and financial sector governance.",
    "Strengthening of reform agenda: proposal of six new structural benchmarks to guide implementation of reform priorities.",
    "External financing: the Fund-supported program has helped catalyze significant external financing to help Moldova bridge immediate financing needs.",
    "Near-term policy priorities:",
    "Fiscal policy guidance:",
    "SOE sector and governance:",
    "Monetary policy and central bank governance:",
    "The program has helped the authorities respond to multiple shocks in an agile and comprehensive way.",
    "Continued progress on governance reforms helps foster resilience and creates a solid foundation for strong and inclusive growth.",
    "Continued reform implementation and maintenance of an appropriate policy mix are critical to withstand downside risks while pursuing longer-term developmental objectives.",
    "**Pr2301 Rom**",
    "[Kenji Okamura](https://www.imf.org/en/About/senior-officials/Bios/kenji-okamura)",
    "[Republic of Moldova and the IMF](http://www.imf.org/external/country/MDA/index.htm)",
    "[Special Drawing Rights (SDRs) -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2023/special-drawing-rights-sdr)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[Press Release](https://www.imf.org/en/News/Articles/2021/12/21/PR21393-Moldova)",
    "[Press Release](https://www.imf.org/en/News/Articles/2022/05/11/pr22149-moldova-imf-board-concludes-adhoc-review-under-ecf-and-augmentation-under-ecf-and-eff)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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