Moldova has to cut budget due to absence of support from EU, World Bank
CHISINAU. Oct 28 (Interfax) - The Moldovan government has prepared amendments to the draft budget for 2015 envisaging budget cuts and a reduction of the budget deficit from 3.3% to 3% of the GDP.
The amendments envisage a reduction of the budget revenues by 3.9% (to 29.15 billion lei from 30.34 lei) and a reduction of the budget spending by 4.6% (to 32.72 billion from 34.31 billion lei), an Interfax correspondent has reported from a meeting of the parliamentary commission on the economy, budget and finance. If the amendments are adopted, the budget deficit will be reduced to 3.57 billion lei from 3.98 billion lei.
"There are certain risks of non-fulfillment of the budget for this year, but the government is taking effective and extraordinary measures to stabilize the situation. Moldova is not under the threat of bankruptcy or default," Moldovan Finance Minister Anatol Arapu said.
The government has to cut the budget because Moldova's external partners, primarily the European Union and the World Bank, have refused to provide funding to support the republic' budget. Initially, the EU and the World Bank were expected to provide 41.5 million euro and $45 million, respectively. However, the foreign partners "froze" direct financing of the budget until Moldova reaches an agreement with the International Monetary Fund (IMF) on granting the next loan to the country amid the high-profile investigation into the withdrawal from Moldovan banks of $1 billion, which revealed numerous facts of corruption in the banking sphere.
In the meantime, the republic has so far not been able to achieve progress in dialogue with the IMF.
