End-of-Mission press releases include statements of
IMF staff teams that convey preliminary findings after a visit to a
country. The views expressed in this statement are those of the IMF
staff and do not necessarily represent the views of the IMF’s
Executive Board. Based on the preliminary findings of this mission,
staff will prepare a report that, subject to management approval,
will be presented to the IMF's Executive Board for discussion and
- The IMF team reached a staff-level agreement with the Moldovan
authorities for the completion of the first review under the Extended Credit
Facility and Extended Fund Facility arrangements.
- The fallout from Russia’s invasion of Ukraine, including the surge in
food and energy prices, trade disruptions, the influx of refugees, and
confidence effects continue to weigh on the outlook for the Moldovan
- Increased IMF and donor financial support are key to help the
authorities cope with these exogenous shocks while providing additional
resources to meet urgent socio-economic needs.
Chisinau , Moldova: An International
Monetary Fund (IMF) mission, led by Mr. Ruben Atoyan, conducted discussions from
July 20-August 10 in Chișinău and IMF headquarters for the first review of
Moldova’s program under the IMF’s Extended Credit Facility (ECF) and Extended
Fund Facility (EFF) arrangements. Mr. Atoyan issued the following statement.
“The IMF team has reached a staff-level agreement with the Moldovan
authorities for policies needed to complete the first review under the program.
The agreement is subject to endorsement by the IMF’s Executive Board, which is
scheduled to consider this review in September. SDR 20.65 million (about US$27
million) would become available after the Board meeting, bringing total
disbursements under the program to about US$245 million.
“Implementation of the program remains strong despite severe and intertwined
shocks. The authorities met all performance criteria, and program-supported
structural reforms in areas of anti-corruption, the rule of law, fiscal sector
governance, and financial sector oversight are progressing apace. The
authorities appointed the head of the Anti-Corruption Prosecution Office—an
important milestone under the program—in June, well-ahead of the schedule.
Successive shocks have not deterred the authorities’ resolve to advance the
much-needed reforms, reaffirming strong ownership and program engagement.
“The war in Ukraine, however, continues to affect the Moldovan economy
significantly. Real GDP is expected to stagnate in 2022. Spillovers from a
worsening global outlook, supply disruptions, and higher input costs, are
compounded by adverse drought conditions on agricultural production. Inflation
accelerated sharply due to increased energy and food prices, and the exchange
rate depreciated, reflecting exceptionally challenging market conditions. Fiscal
indicators remain robust in the first half of 2022, reflecting the confluence of
higher revenue collection and grants but also subpar execution of the approved
budgetary spending. Well-capitalized, liquid, and profitable, banks have
weathered the impact of the current crisis satisfactorily.
“The National Bank of Moldova’s data-driven approach to monetary policy has
been instrumental in anchoring inflation expectations. Since the beginning of
the year, the authorities have adjusted monetary policy to contain the
second-round effects of higher imported inflation and supply-side disruptions.
With the inflation outlook marred by deteriorating external environment, the
authorities remain committed to exchange rate flexibility, which acts as a shock
absorber, and foreign exchange interventions will be limited to smoothing
excessive volatility and preventing disorderly market conditions.
“ The 2022 supplementary budget agreed with the mission a ppropriately
envisages additional allocations to cushion vulnerable people from rising energy
and food prices. Going forward, concerted efforts are warranted to address
persistent under-execution of approved budgetary spending with a view to improve
spending efficiency and foster budget credibility. With risks skewed to the
downside, a strong policy momentum remains critical to securing budget financing
from external partners.
“Downside risks continue to beset the economic outlook.
Sharper-than-anticipated increases in energy prices, disruption in energy
supplies, escalation of international food prices, the rising cost of living,
and proximity of the war in Ukraine could further derail activity and hurt
confidence, aggravating policy tradeoffs. Resolute implementation of a
comprehensive package of reforms and continued support from the IMF and other
partners would anchor confidence.”
PRESS OFFICER: Wafa Amr
Phone: +1 202 623-7100