In December 2021, the IMF approved an Extended Credit Facility and Extended Fund Facility (ECF–EFF), which provided welcome support for Moldova’s reform momentum amid energy price shocks and the COVID-19 pandemic. The macroeconomic framework underpinning the IMF program already took account of important risks to the Moldovan economy. Regrettably, many of these risks have materialized beyond expectations due to the Russian invasion of Ukraine on February 24. The ensuing crisis has strongly exacerbated multiple pressure points of the Moldovan economy, with a marked deterioration of economic and financial conditions, sharply increased food and energy prices, and a massive inflow of refugees. As a result, additional and more frontloaded balance of payments assistance is needed to bridge the crisis period and to make it possible to continue pursuing the country’s reform and developmental agenda. Given this context, and as explained in their Letter of Intent, Moldovan authorities have requested an ad-hoc review under the ECF arrangement and an augmentation and rephasing of access under the ECF-EFF arrangements.
The Moldovan authorities wish to thank Mr. Atoyan, Mission Chief, Mr. Chawani, Resident Representative, and the entire team for the in-depth and constructive engagement. They thank the IMF in particular for its quick response in difficult circumstances, with a staff visit taking place only a couple of weeks after the start of the war in Ukraine. The authorities subscribe to the thrust of the Staff Report and reconfirm their strong commitment to sound policies and the objectives of the ECF-EFF program.