IMF to provide Moldova with some $175 mln for budget support

CHISINAU. July 1 (Interfax) - The International Monetary Fund (IMF) will allocate around $175.2 million to support Moldova's budget, the IMF office in Chisinau told Interfax.

"The IMF Executive Board [...] allows for immediate disbursement of SDR 133 million (about $175.2 million) under both programs, usable for budget support. Additional reforms are needed to strengthen the governance, autonomy, transparency, and accountability of the [National Bank of Moldova] NBM. The authorities should continue working closely with staff to implement the measures identified through the recent diagnostic of the NBM in a timely manner," the statement said.

The decision was made after the fifth review under the Extended Credit Facility (ECF) and Extended Fund Facility (EFF), and the first review under the Resilience and Sustainability Facility (RSF). This brings Moldova's total disbursements under the ongoing program arrangements to about $636.5 million.

"The economy grew by 0.7 percent in 2023, and the recovery is expected to continue, although at a weaker than previously projected pace," IMF analysts said.

According to IMF Deputy Managing Director and Acting Chair Kenji Okamura, the implementation of the cooperation program with Moldova sticks to the agreed parameters, although there have been some delays on structural reforms.

The IMF believes that Moldova's fiscal policy should remain focused on protecting the most vulnerable and on supporting the economy. At the same time, maintaining a gradual fiscal consolidation is needed to build buffers and preserve debt sustainability, especially given the expected decline in external grants over the medium term.

The 40-month ECF and EFF program was approved by the IMF in December 2021.