Moldova & IMF IMF Activities Publications Press Releases


Chisinau, march 26 (INFOTAG). An IMF mission has completed its working visit to
Chisinau, which began on March 13. Mission head Mrs. Marta Castello-Branco told a
news conference today she is not ruling out that things may develop according to
an optimistic scenario which will permit Moldova to receive two tranches totaling
$25 million in early June.

She said the IMF experts scrutinized the general economic situation in Moldova
and, in particular, the degree to which governmental decisions influence the
private sector's condition, as well as the Government's fiscal policy.

Mrs. Castello-Branco said the International Monetary Fund and Government do not
yet share a common view on these issues. The IMF experts presume that decisions
taken in Moldova have not only an economic component but also a political one.
Due to this reason, some governmental decisions cannot be considered as good and
correct from the economic viewpoint.

For example, the IMF has a fairly conservative attitude to the Budget, and each
new article of expenditures causes IMF's circumspection and questions. These
feelings pertain to both past decisions and to the ones yet to be taken.

She said that the mission had failed to hear an answer about where the money for
the administrative-territorial reform was going to come from, and that the
answers heard here - that the reform will, allegedly, cost nothing - cannot suit
the IMF.

Marta Castello-Branco said the Fund is concerned also about the Government's
intention to undertake another salary hike, for the mission could not see extra
reserves in the Budget that would provide for this.

In her view, the Government decides on new Budget expenditures without listening
to the opinions of those people and entities which form this very Budget. The
mission has handed in a memo on 6 pages containing remarks about the current
situation and Government's economic policy.

"At the moment, the ball is on the Government's field. If all the Fund's
conditions are fulfilled, our next mission will be ready to come to Moldova",
said Marta Castello-Branco.

She pointed out the IMF has run out of all possibilities that could be used for
achieving a compromise with the Moldovan Government. The mission head voiced
satisfaction with the fruitful technical meetings she had in the National Bank
and Ministry of Finance.

Your correspondent asked which macro-economic situation is going to be here if
Moldova does not receive credits from the International Monetary Fund, World Bank
and European Union, and Mrs. Castello-Branco replied that in such case the 2003
Budget will have to be amended.

"We, together with the National Bank, would like to reduce the optimism
concerning the 6-7% inflation rate being forecast for this year", she said,
making it clear that without the Budget-projected $46 million from the WB and EU,
Moldova will find it very difficult to service its 2003 external liabilities.