The Executive Board of the International Monetary Fund (IMF) approved the allocation of $96 million to Moldova to support the country's economy, the organization said Thursday
MOSCOW (Pakistan Point News / Sputnik - 27th April, 2023) The Executive board of the International Monetary Fund (IMF) approved the allocation of $96 million to Moldova to support the country's economy, the organization said Thursday.
In December 2021, the IMF launched a 40-month program with Moldova to provide about $558 million to the country. In May 2022, the IMF increased the amount of financial support by $260 million.
"The Executive Board of the International Monetary Fund (IMF) concluded the third review under the 40-month Extended Credit Facility (ECF) and Extended Fund Facility (EFF) arrangements (1) for the Republic of Moldova. (2) This allows for the immediate disbursement of SDR 70.95 million (about US$96 million), usable for budget support," the IMF said in a statement.
Inflation in Moldova remains high, but continues to decline rapidly, the statement noted, adding that the allocations aim to mitigate the consequences of overlapping crises and promote economic recovery.
In addition, risks to the Moldovan energy sector have now decreased, the IMF said.
The IMF noted that the total amount of support provided has reached about $371 million.
Moldova has been grappling with an energy crisis due to disrupted supplies and rising prices, with the gas price increasing almost seven times and the electricity price four times in 2022. Last fall, the republic faced a record level of inflation, which affected many sectors of the economy.
In late January, the European Commission decided to allocate 145 million Euros ($152 million) of financial assistance to Moldova, however, the decision must be approved by the European Parliament first. This financial support will depend on the progress of the republic's program with the IMF and the fulfillment of certain tasks agreed between Moldova and the EU. These conditions will cover such key areas as strengthening economic governance in Moldova, fighting corruption, strengthening the rule of law and energy security. The funds are expected to come to Moldova in two tranches � the first will be sent in the third quarter and the second in the fourth quarter of 2023.
