Washington, DC: An International Monetary Fund (IMF) mission, led by Alina Iancu, met with the Moldovan authorities in Chișinău during May 7–20, 2026, to discuss their request for a new 36-month Policy Coordination Instrument (PCI).
At the conclusion of the discussions, Ms. Iancu issued the following statement:
“I am pleased to announce that the Moldovan authorities and IMF staff have reached a staff-level agreement on policies and reforms under a new 36-month Policy Coordination Instrument (PCI). The previous IMF-supported program helped preserve stability amid Russia’s war in Ukraine and repeated energy crises. The new PCI—a non-financing instrument designed to support strong economic policies—underscores the authorities’ continued commitment to macroeconomic and financial stability and durable growth. This staff-level agreement is subject to approval by IMF’s Executive Board.”
“While the economy recovered in 2025 despite the energy crisis early in the year, a renewed energy shock is weighing on economic activity and increasing pressures on inflation in 2026. Real GDP grew by 2.4 percent last year, supported by resilient domestic demand and a strong recovery in agriculture. Headline inflation averaged 7.8 percent in 2025, and returned to the National Bank of Moldova’s (NBM) target range of 5±1.5 percent in early 2026 as food and energy price pressures eased. However, the new energy shock stemming from the war in the Middle East is reducing growth and raising inflation. Growth this year is expected to slow to 1.5 percent, as higher energy costs and weaker external demand will constrain consumption, investment, and exports. Average inflation is projected to reach 8.1 percent in 2026, while the current account deficit is projected to widen to 22.1 percent of GDP.”
“Moldova’s outlook is highly dependent on the duration and intensity of the war in the Middle East, as well as the war in Ukraine. Persistently high energy costs could lead to sustained inflationary pressures, while disruptions in fertilizer and fuel markets could adversely affect agricultural output. Elevated uncertainty and tighter global financial conditions could also weigh on investment, remittances, and external demand. These shocks could further weaken growth and widen external imbalances.”
“Fiscal policy under the program will be guided by a credible medium-term fiscal consolidation path. The authorities are committed to reducing the deficit to 3.5 percent of GDP by 2029, while creating adequate fiscal space to support capital investment, wage reform, and social spending. This objective will be achieved through broad-based reforms to strengthen the tax system, with particular focus on broadening the VAT, simplifying income taxes, and improving revenue administration.”
“Public finance management reforms will focus on strengthening medium-term budget planning, improving cash and debt management, enhancing public investment management, and anchoring fiscal policy with robust rules. The PCI also aims to improve the assessment of fiscal risks arising from state-owned enterprises.”
“The NBM will continue to closely monitor macroeconomic conditions and inflation risks, and use available tools to maintain price stability. Moldova is focused on strengthening its financial sector through enhanced macroprudential policies and stress testing, regulatory and supervisory frameworks, financial safety nets, and financial integrity, guided by recommendations from the IMF-World Bank Financial Stability Assessment Program (FSAP).”
“Other reforms under the program will focus on protecting the use of public money. In addition, improving the quality, coverage, and timeliness of economic statistics will support policymaking. Through its policies and reforms, the PCI will also support Moldova’s strategic aspiration to advance its EU accession agenda.”
“The mission team would like to thank the Moldovan authorities for their excellent cooperation and constructive discussions during the mission and to reaffirm the IMF’s support for the government’s efforts to implement its economic reform program.”
