Moldova & IMF IMF Activities Publications Press Releases

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Chisinau-16.03.2004/15:51:03/(BASA-economic) The Poverty Reduction
and Economic Growth Strategy Paper (EGPRSP) is "rather good", and the
International Monetary Fund (IMF) will be waiting to see how the
Moldovan government enforces this document, IMF Resident
Representative Edgardo Ruggiero stated at a news conference on

Work on the EGPRSP is a subject to be discussed between a visiting
IMF mission and the Chisinau authorities, starting Wednesday, he

The EGPRSP is the first step that denotes the intentions of the
Moldovan government to change its economic policies in agreement with
the recommendations made by the IMF Executive Board six weeks ago.
A report of the Board said Moldova must demonstrate in action a
change of its economic policies, in order to facilitate the beginning
of negotiations with the international community regarding new
assistance programmes.

Developing a growth strategy is a concrete action that shows what the
government intends to do, and the international organizations will
wait and see how it fulfills this strategy, and what are its positive
and negative aspects, Ruggiero emphasized.

The IMF and the World Bank will evaluate the EGPRSP together before
forwarding this document to the World Bank Board of Directors for
approval in mid-June. Negotiations on a new IMF programme for Moldova
may start days before or after this date.

The first phase of the public consultation process on the EGPRSP will
complete on April 1, and the government will then have to approve
this document. Thirty-five seminars and roundtables at local and
national level have been held as part of this process until now, with
the participation of representatives of the cabinet, parliament,
presidency, civil society, business community, academic circles,
donors, and trade unions.

The EGPRSP is a medium-term - 2004-2006 - development strategy, which
sees an annual economic growth of at least five percent for the next
years. The Gross Domestic Product represents now 42 percent of the
level registered in 1990, the year which preceded the crisis. The
EGPRSP developers say that in 2002 over 40 percent of the Moldovan
population lived under the absolute poverty line. The absolute
poverty level in 2002 was estimated at 270.67 lei (20 dollars) per

Economics Minister Marian Lupu has said recently that the government
has in view the approval of the EGPRSP in the first decade of April.


Chisinau-16.03.2004/17:20:09/(BASA-economic) IMF Resident
Representative Edgardo Ruggiero stated at a news conference on
Monday that the 2004 budget of Moldova should be revised, because
macroeconomic indicators have changed. The situation has changed,
it's not what it used to be in September-October, when forecasts were
counted to work out the budget - first of all the macroeconomic
indicators are different.

According to the IMF official, the government should reduce the
expectations for incomes from the privatization programme and from

In work on the 2004 budget, the Chisinau government took into account
170 million lei in privatization incomes and 289 million lei in
foreign grants. As the privatization process stagnates, and foreign
donors are waiting IMF approval for international assistance for
Moldova, obtaining these incomes is problematic, according to

Ruggiero also considers that incomes from imports will be larger and
that there are premises for more hopes for incomes due to a lower
inflation rate than expected. The budget for 2004 was based on a
4.5-percent inflation, and later the Economics Ministry rectified
this indicator to 10.0 percent, after reviewing the economic
performance in 2003. Now the ministry anticipates a 6-percent growth,
which is 1 percent more than first predicted. Imports were recently
anticipated to grow by 8.7 percent, unlike 7.8 percent forecasted

The deputy economics minister, Veaceslav Afanasiev, has recently
announced that the 2004 budget has to be supplemented with an
anticipated 600-700 million lei (44-52 million dollars) in revenue.

The 2004 state budget was built on incomes of 5.647 billion lei and,
respectively, spending in the amount of 5.307 billion lei, with an
surplus of 340 million lei, which will be converted for payment of
foreign debts this year. In mid-2003, the government supplemented the
revenue by more than 700 million lei.