Moldova & IMF IMF Activities Publications Press Releases

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Chisinau-03.11.2004/16:11:32/(BASA-economic) The Moldovan government
has registered a good progress at technical level, but the pace of
reforms is still slow, a mission from the International Monetary Fund
(IMF) announced on Wednesday at the end of a two-week visit to

"At the meetings we have had at the National Bank, the Ministry of
Finance and the Ministry of Economics, we saw a great desire to
improve things," the IMF's chief negotiator for Moldova, Marta
de Castello Branco told a news conference. The credibility of the
Moldovan authorities, however, will be tried in the process of
implementation of the Economic Growth and Poverty Reduction Strategy
Paper, she specified.

De Castello Branco urged the authorities to take measures for
improvement of the business environment, and to address the
budgetary/fiscal policies with maximum precaution. "We are expecting
a signal from the government, which will clearly show its willingness
to walk toward a market economy," noted Mrs. de Castello Branco.

The economic growth, she continued, is a positive signal, but the
main preoccupation is the quality of this growth and its duration.
"The trade deficit is increasingly growing, but it is covered by
remittances of Moldovan migrant workers." Remittances in GDP place
Moldova on the first spot in Europe, accounting for 25 percent of it.
These remittances encourage consumption and is a major factor of
growth, the mission found. Trade facilitation should be a key concern
of the government, which instead keeps on building export barriers.

What are the forecasts for this year? Mrs. de Castello Branco
believes that the objective to hold inflation at 10 percent is
achievable, under the condition that the monetary mass growth slows
down. The leader of the mission was also optimistic about achieving a
7 percent growth in Moldova.

However, she avoided to name any clear terms when the Chisinau
government will be invited to negotiate a new memorandum with the IMF
or when the lender would release new funds; like in the past - in
2002 and in 2003 - "everything is in the hands of the government."

The IMF mission was in Moldovan on an assessment visit between
October 19 and November 3.

Moldova does not benefit at present from the IMF's assistance. The
expired programme had envisaged 147 million dollars worth of
assistance, of which the country had received three tranches worth
some 37 million dollars. The last tranche was made available in July
2002 and the programme ran off in December 2003.