An International Monetary Fund (IMF) team, led by Alina Iancu, has concluded discussions with Moldovan authorities regarding the sixth reviews of Moldova's programs under the Extended Credit Facility (ECF) and Extended Fund Facility (EFF) arrangements, as well as the second review under the Resilience and Sustainability Facility (RSF). These discussions took place in Chișinău, Washington, and virtually over recent weeks.
Ms. Iancu announced that a staff-level agreement on policies has been reached to complete these reviews. This agreement is pending approval from the IMF Management and Executive Board. If approved, it will make Special Drawing Rights (SDR) 111.4 million available to Moldova, equivalent to approximately US$148.3 million. The total disbursements under these ongoing programs would then amount to about US$810 million.
"The recovery from adverse spillovers from Russia’s war in Ukraine and energy price shocks is taking hold," stated Ms. Iancu. She noted that growth projections are set at 2.6 percent for 2024 and 3 percent for 2025, primarily driven by strong domestic demand. Inflation has remained within the National Bank of Moldova’s target corridor since October 2023.
However, risks remain high due to factors such as the war in Ukraine and potential renewed energy shocks. On a more positive note, progress on structural reforms related to the EU Growth Plan and Moldova's EU accession path presents upside risks.
The fiscal deficit forecasts for 2024 and 2025 have been revised downward to 4.4 percent and 4 percent of GDP respectively, reflecting stronger-than-expected revenues from wage and import growth while maintaining government spending levels.
Quantitative performance indicators have shown strength; however, structural reform implementation has been uneven according to Ms. Iancu's statement. The Moldovan authorities completed conditionality concerning financial inclusion, insurance sector improvements, and state-owned enterprises management reforms while legislative amendments aimed at strengthening autonomy and governance of the National Bank of Moldova are anticipated soon.
Further actions include establishing an Anti-Corruption Court and ensuring appropriate staffing levels at the Anti-Corruption Prosecutor’s Office—both remain pending tasks along with other RSF reform measures requiring additional time for completion.
Consideration by the IMF Executive Board is scheduled for mid-December with expectations that two more reviews will occur before concluding in October 2025.