IMF sees improvements in Moldova’s economy
“Moldova has quietly and steadily been implementing a series of economic reforms, supported by a 3-year program under the IMF’s Extended Credit Facility.” The statement belongs to the IMF mission chief, Nikolay Gueorguiev, who answered some questions in an interview to the IMF Survey Magazine.
“The country, which aspires to deeper integration with the European Union (EU), has been growing strongly for the past two years but is now faced with increasing risks, in part because of the slowing world economy and the ongoing crisis in the euro zone, in part because reforms now need to be taken to the next level.” This is the opinion about Moldova’s progress for the last three years.
Mr. Gueorguiev believes that the economy of the country “performed strongly for a second year in a row thanks in large measure to the government’s successful policies to stabilize the economy and improve the business climate.”
The IMF mission chief explains that the financial assistance given to Moldova was effective and productive results are registered.
“The results achieved so far are very good. The budget deficit has declined by two-thirds since 2009, largely because of a reduction in government spending by over 6 percentage points of GDP. At the same time, public investment has increased by nearly 20 percent in real terms. Spending on programs for social assistance has also been increased considerably,” said Nikolay Gueorguiev.
Asked about the potential economic risks for Moldova in 2012, the IMF official said that “a deep recession in the EU spilling over to Russia and Ukraine could push Moldova into a recession through plummeting remittances, exports, and private capital inflows. That would put pressure on the budget and possibly on the banks if borrowers start falling behind on their loans.”
Despite of the fact that thousands of people are still living under harsh poverty, the IMF representative considers that Moldova has met most of its targets within the Millennium Development Program.
“As for the poverty rate and other Millennium Development Goals, Moldova has already met most of the intermediate 2010 targets. The 2015 Millennium Development Goals are certainly within reach, provided the strategy is successfully implemented,” concluded Mr. Gueorguiev.
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