Moldova to receive in 2019 the next tranche of the IMF loan totaling $46.5 million, if the preliminary measures agreed with the Fund are carried out
This was announced at a press conference on Wednesday by Moldovan Prime Minister Maia Sandu and the head of the International Monetary Fund Mission, Ruben Atoyan, as the meeting summed up the work of the Fund’s experts in our country during June 26 to July 10. As noted, the parties reached agreement at the staff level on the results of the fourth and fifth reviews of the 3-year economic reform program supported by the IMF. This agreement is to be approved by the leadership and the Executive Board of the IMF. Consideration by the Executive Board can take place in September 2019, subject to implementation by the authorities of agreed prior actions on ensuring the sustainability of public finances, improving tax compliance, and advancing the banking sector rehabilitation. Upon completion of the review, Moldova will have access to a tranche of about $46.5 million. As noted by Ruben Atoyan, the mission reached an understanding on fiscal measures needed to correct policy slippages from the 2018 package of tax initiatives and capital and tax amnesty that undermined program objectives and led to rising budgetary pressures. The authorities plan to approve a sound 2019 supplementary budget to mitigate fiscal vulnerabilities, while protecting priority social spending. Maia Sandu recalled that the IMF program for Moldova was suspended in 2018 after the previous government adopted a series of unsuccessful decisions - the law on tax amnesty and a package of tax reform legislation that unbalanced the budget. “We agreed with the IMF on measures and decisions to remedy the situation, adjust the budget while maintaining all the important expenses - salaries, pensions, benefits, assistance to socially vulnerable people,” the Premier said. According to her, the upcoming budget adjustments will be made taking into account the plans to receive an EU grant totaling 1 billion 368 million lei, which will allow not to reduce costs, but to redistribute them into some items so that there are no problems with paying higher wages for which sources of financing were not provided, etc. Maia Sandu noted that the government will ask parliament to meet in August for a special session to approve amendments to the budget and have time to transfer all necessary documents to the IMF to complete the review on Moldova at a meeting of the Board of Directors in September. She also stressed that the action program agreed with the IMF Mission also contains measures for the return of money stolen from the banking system. The Prime Minister also pointed out that the agreed action program with the IMF contains measures to improve tax administration, increase the efficiency of government spending and other actions to increase tax and financial responsibility. // 10.07.2019 - InfoMarket.