IMF allocates latest $163 mln tranche to Moldova as part of EFF/ECF program
CHISINAU. Dec 18 (Interfax) - The Executive Board of the International Monetary Fund (IMF) has decided to allocate a new tranche of $162.6 million to Moldova as part of two ongoing lending programs, the IMF said in a press release.
The funds were allocated following the completion of the sixth review of the two lending programs in Moldova - under the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF), as well as the second review of the program under the Resilience and Sustainability Facility (RSF).
The total amount of disbursements under the current programs will stand at approximately $810.2 million, the IMF said.
The IMF noted the recovery of Moldova's economy and the overall successful implementation of reforms which are supported by these credit programs.
"The economic recovery is taking hold with growth [of Moldova's GDP] projected at 2.6 percent this year and 3 percent next year. The fiscal deficit is projected to decline from 5.2 percent of GDP in 2023 to 4.4 percent in 2024 and 4.0 percent in 2025 reflecting stronger-than-expected revenues, driven by buoyant wage and import growth and contained spending," it said.
However, there are risks of a slowdown in Moldova's economic recovery, IMF Executive Board Acting Chair Kenji Okamura said. "While economic recovery picked up in 2024 and is expected to continue in 2025, risks remain tilted to the downside. The authorities should pursue prudent policies and maintain buffers and robust contingency plans, including in the energy sector, while fostering growth-friendly investment and reforms, which will be also supported by the EU accession process," Okamura was quoted as saying.
"Energy and other shocks call for cautious, data-driven approach to monetary policy and for maintaining sufficient foreign exchange buffers," he said.
An IMF mission held consultations with Moldova's authorities in the first ten days of October as part of its review of the two credit programs and assessment of the economic situation.
In early November 2024, the Moldovan parliament's press service, referring to draft amendments to the laws on attracting external state loans from the IMF, said that the fund would increase financing for the two credit programs under the EFF and ECF by a total of $151 million. Subsequently, the Moldovan government approved an increase in the country's IMF capital quota by 50%, or 86.3 million SDR (approximately $114 million), from 172.5 million SDR to 258.8 million SDR or around $342 million.
The 40-month ECF/EFF program for Moldova, approved on December 21, 2021, and extended in May 2022, is supported by a loan of approximately $805 million, of which about $608 million has already been disbursed. A new agreement under the RSF was approved in December 2023 for approximately $175 million, of which $44 million has been disbursed.
