January 10 (SeeNews) - The International Monetary Fund (IMF) said that it is providing Moldova with access to $27 million (25.3 million euro) to help the country cope with the impact of the war in Ukraine and surging international energy and food prices.
The decision was taken after the IMF's executive board concluded the second review under the 40-month Extended Credit Facility (ECF) and Extended Fund Facility (EEF) Arrangements for Moldova, the global lender said in a press release on Monday.
The new financing brings total disbursements under the extended programme to about $275 million. According to the IMF, spillovers from the war in Ukraine continue to weigh heavily on Moldova, with disruptions of energy supply putting additional pressure on the Moldovan economy. According to the IMF, Moldova's economy is projected to contract by 1.5% in 2022, followed by a modest recovery of 1.5% in 2023 due to the protracted impact of Russia’s war against Ukraine and the worsening outlook of Moldova’s main trading partners.
Risks to the outlook are high and firmly tilted to the downside, including risks of further escalation of the war in Ukraine. Moldova’s programme implementation remains strong despite the difficult environment, with completion of important program commitments in the areas of fiscal and financial governance, and reforms of the state-owned enterprises (SOEs) sector, the IMF noted.
In April, the IMF agreed to boost funding for Moldova by $267 million after the government requested it to review its funding agreement so that the arrangement reflects the new economic context.
($ = 0.937 euro)