Credit program with Moldova terminated due to authorities' failure to fulfill budget obligations - IMF
CHISINAU. Nov 13 (Interfax) - The International Monetary Fund (IMF) terminated the implementation of credit programs with Moldova in October due to the authorities' failure to fulfill obligations in fiscal policy, the IMF's Moldovan representation said.
"In December 2024, the IMF Executive Board completed the sixth review under the Extended Credit Facility (ECF) and Extended Fund Facility (EFF) agreements as well as the second review under the Resilience and Sustainability Facility (RSF) with Moldova, which allowed for the disbursement of around $162.6 million. The terms of both agreements with the fund expired in October 2025, as the fulfillment of the remaining obligations in the area of fiscal policy and governance was delayed," the representation was quoted as saying by the publication mold-street.com.
The suspension of IMF tranches totaling $170 million does not pose financial risks for the country, Moldovan Finance Minister Andrian Gavrilita said while presenting amendments to the 2025 budget law in parliament on Wednesday.
"There are other sources of funding, primarily the European Union. Therefore, the issue is not that there are any risks of underfunding, but rather that we can increase the speed at which we can utilize and invest these funds. There are no underfunding risks at the moment. The main question is how to spend the money correctly with maximum return," Gavrilita said.
The ministry's Secretary of State Ion Gumene in turn said that the absence of IMF review missions this year is related to the holding of elections. "IMF review missions, as a rule, do not come before elections; they arrive after them. Therefore, one cannot speak of a block, or that they are not giving us money. Simply, the term of the agreement, the program, has expired. There are no other risks. The main source of funding is the European Union. There are also bilateral partnerships," Gumene said, adding that an IMF review mission is already due to arrive in Moldova in December and discussions with the fund will continue.
On Wednesday, the chairman of the parliamentary commission on the economy, budget and finance, Radu Marian, said that the IMF had blocked the final tranche, which was supposed to be transferred to Moldova under the 40-month cooperation program with the country's government and amounts to $170 million.
"At some point, the priorities were different, which is why the program expired. But we have covered all the budget needs for 2025, and currently there is no threat to the state budget," he said.
The 40-month ECF/EFF program for Moldova, approved in December 2021 and extended in May 2022, was initially supported by a credit of around $805 million. Furthermore, in December 2023, a new arrangement under the RSF (financing for resilience and sustainable development) was approved for around $175 million. In early November 2024, the Moldovan parliament's press service said that the fund would expand financing for the EFF/ECF credit programs by a total of $151 million.
The IMF conducted six review missions for the implementation of the ECF/EFF credit programs and two reviews for the RSF program. The total amount of funds allocated to Moldova under these programs amounted to $810 million as of December 2024.
On March 10 this year, the IMF representation in Chisinau announced a visit by another fund review mission for the EFF/ECF programs. However, no reports about the mission's visit or the results of its work followed.
In April, the country's state budget deficit was increased 28.9% to 17.9 billion lei (5.1% of GDP). The amendments to the 2025 budget include financial resources provided by the European Union to subsidize energy tariffs, as well as an advance and the first tranche of a financial support package from the EU to finance Moldova's economic growth plan, the Moldovan parliament said.
The Moldovan authorities expect an IMF mission in December to discuss prospects for cooperation, Marian said on Wednesday. "We had a completed program cycle with the IMF, and in December a new fund mission will arrive in Chisinau to discuss what has been implemented and what has not. Cooperation with the IMF continues. It is an important partner for us," he said.
The official exchange rate on November 13 is 16.96 lei/$1.
