Press Release

Chisinau, Mai 28 ( INFOTAG ). A Mission of the International Monetary Fund will pay a visit to Moldova in mid June, said IMF Resident Representative to Moldova, Tokhir Mirzoev.

He said on Tuesday at a meeting with a group of journalists that the IMF Mission will be led by its outgoing Head, Nikolay Gueorguiev.

Tokhir Mirzoev also said that by mid June, the situation around the creation of a new government will be much clearer.

"If the country has a full-fledged Government, the IMF Mission will discuss a new cooperation program with Moldova. Yet, if the country moves towards early parliamentary elections, the IMF Mission will discuss with the acting government how to minimize the budgetary losses in this period," said Mirzoev.

He also recalled that the previous IMF Program with the Moldovan Government had been extended for another three months and expired in late April 2013.

"Some of the latest decisions taken by the Moldovan government ahead of its resignation, run counter to the IMF Program," said Tokhir Mirzoev, drawing attention to the fact that many issues have been successfully completed over those three years of cooperation.

Among the main achievements of the cooperation program, he named the reduction of the budgetary deficit, the macro-economic stability, the efficient monetary policy and the decrease of the inflation rate.

"Over the past three years, we have witnessed positive developments in the dynamics of the budgetary deficit," said Mirzoev, noting that in 2013, Moldova stood good chances to have a stable position in terms of state budget.

Referring to the situation of the 2013 state budget, he said that the absence of a Memorandum of Cooperation between the Moldovan Government and the International Monetary Fund may negatively tell on some projects due to be carried out with international institutions, and on the proceeds due to enter the state budget within the frameworks of this projects.

As example, Tokhir Mirzoev named the cooperation with the World Bank (WB) and the fact that some of the WB projects require the presence of a Memorandum with the International Monetary Fund.

"In this connection, it is necessary to identify additional financing sources or to resort to amendments of some budget items," he said.

The IMF Resident Representative to Moldova said that the International Monetary Fund has not changed its previous economic forecast for the country, according to which Moldova's economic growth will make 4% in 2013.

"We suppose that 2.5% will be attained in the farming sector that will recover after the losses incurred after the 2012 drought, whereas the rest - 1.5% will be achieved in other sectors of the Moldovan economy," said Mirzoev, noting that the current indexes confirm the potential for this GDP growth in 2013.

Infotag's dossier: Since 1993, Moldova has had the following arrangements with the IMF in support of the authorities' economic adjustment programs: Compensatory and Contingency Financing Facility (CCFF), Systemic Transformation Facility (STF), Stand-by arrangements (SBA), Extended Fund Facilities (EFF), and Poverty Reduction and Growth Facilities (PRGF) - from 2009 called Extended Credit Facilities (ECF). In 2009 Moldova has also benefited from a one-time SDR allocation amounting to SDR 117.71 million. At the same time, due to the recommendations of the International Monetary Fund, as well as to concessionary financing, the Republic of Moldova managed to attain financial stability after the 2009 economic downturn. The major part of the financial assistance provided by the International Monetary Fund was used for replenishing the currency reserves of the National Bank. The IMF describes these proceeds as a "safety cushion" for the Moldovan economy, in case of external shocks a nd challenges, as the national economy is very vulnerable towards foreign influence. At present, Moldova's currency reserve makes US$2.47 billion.