Moldova: The AEI government secures a new IMF loan
Overview:
The new, pro-EU government in Moldova has fulfilled the necessary prior conditions to receive IMF Executive Board approval for the US$574 mn Extended Credit Facility and Extended Fund Facility (ECF/EFF) programs agreed at Staff level towards the end of last year. Given a sharp deterioration in the economic situation as a result of weak growth and fiscal indiscipline, the core of the program foresees significant fiscal consolidation, a more flexible exchange rate regime and the implementation of structural reforms. The political situation in Moldova remains unstable. However, this program - coming in addition to a loan from Russia that has helped to rebuild FX reserves – will help to make economic policies more sustainable in the interim as long as it is implemented successfully.