## IMF Executive Board Concludes Third Review Under the Extended Credit Facility and Extended Fund Facility Arrangements for the Republic of Moldova

_IMF News, April 26, 2023_

## Source details

**Canonical URL:** [IMF Executive Board Concludes Third Review Under the Extended Credit Facility and Extended Fund Facility Arrangements for the Republic of Moldova](https://www.imf.org/en/news/articles/2023/04/26/pr23128-moldova-imf-executive-board-concludes-review-under-ecf-and-eff)

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## Bibliographic details
- Published: April 26, 2023

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### Key financial actions and program status
- The Executive Board completed the third review under the 40-month Extended Credit Facility (ECF) and Extended Fund Facility (EFF) arrangements.
- Immediate disbursement: SDR 70.95 million (about US$96 million), usable for budget support.
- Total disbursements under the blended ECF/EFF arrangements to date: SDR 277.55 million (about US$371 million).
- Original program access after augmentation: SDR 594.26 million (augmentation referenced in source materials).

### Economic performance and outlook
- Moldova’s economy contracted sharply in 2022, reflecting spillovers from the war.
- A modest recovery is expected in 2023, supported by a pickup in domestic demand and better growth prospects in trading partners.
- Inflation remains high but continues to decline rapidly.
- Fiscal policies are focusing on mitigating the impacts of the overlapping crises and supporting economic recovery.
- International reserves continue to provide an adequate safeguard against external shocks.
- Banking sector condition noted as well-capitalized, liquid, and profitable, having weathered the initial impact of the war.

### Risks and contingency developments
- Principal risk: further escalation of the war, leaving the outlook subject to extreme uncertainty.
- Russia’s war in Ukraine and its proximity to Moldova continue to fuel security concerns.
- Prudent use of contingency plans has reduced energy security risks for now and supported the most vulnerable through the cost-of-living crisis.
- Near-term priorities recommended given high uncertainty:
  - Mitigate the impact of the war.
  - Ensure energy security.
  - Adapt contingency plans to evolving risks.
  - Maintain an appropriate policy mix.

### Policy guidance and conditionality
- Monetary policy:
  - Current gradual monetary policy easing described as appropriate given the inflation outlook.
  - Future monetary policy decisions should remain data-driven and forward looking, with further easing conditional on a persistent decline of both headline and core inflation.
- Fiscal policy:
  - Authorities plan to reorient spending toward supporting the recovery once near-term pressures from the crises subside.
- Structural and institutional reforms emphasized:
  - Advance reforms in fiscal governance.
  - Strengthen financial sector oversight.
  - Improve governance and efficiency of state-owned enterprises.

### Governance, anti-corruption, and climate-related actions
- Program implementation remains strong despite the challenging environment.
- Recent completion of important reforms aimed to:
  - Promote the integrity, capacity, and independence of key anti-corruption institutions.
  - Enhance enforcement of the anti-corruption legal framework.
- Authorities are developing an ambitious agenda to address climate-related challenges.
- Authorities have expressed interest in receiving financing under the IMF’s Resilience and Sustainability Facility to support climate-related policy and development goals and to help catalyze official and private financing for green investments.

*IMF Press Release No. 23/128, April 26, 2023*

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## References

- [Republic of Moldova and the IMF](http://www.imf.org/external/country/MDA/index.htm)
- [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)

_Source: https://www.imf.org/en/news/articles/2023/04/26/pr23128-moldova-imf-executive-board-concludes-review-under-ecf-and-eff_