Statement by the IMF Staff Representative June 29, 2018

The economy strengthened in 2017. Higher-than-expected GDP growth was driven by strong domestic demand and a positive external environment.

Abstract

The economy strengthened in 2017. Higher-than-expected GDP growth was driven by strong domestic demand and a positive external environment.

This statement provides information that has become available since the issuance of the staff report on June 15, 2018. These developments do not affect the thrust of the staff appraisal.

1. All three prior actions for this review have been completed. In addition to the actions reported as having been completed in the staff report (EBS/18/55), related to the 2018 budget amendment and a high-level asset recovery strategy, on June 15, 2018, the Moldovan Parliament approved legal amendments to the new shareholder removal model, thereby completing the last of the three prior actions.

2. An agreement on the sale of “problem” shares in MAIB was signed, as expected. On June 20, 2018, the EBRD Board of Directors approved its participation in an auction for the acquisition of a 41.09 percent stake in MAIB. On June 22, 2018, a pre-contract was signed between the Government of Moldova and the EBRD-led consortium of investors for the purchase of these shares, paving the way to conclude the transaction, which is expected in late summer.

3. The National Bureau of Statistics (NBS) released 2018 Q1 GDP data, along with revised historical national accounts data. In line with expectations, real GDP growth slowed to 3.7 percent year-on-year in 2018Q1, while domestic demand and household consumption remain robust. The NBS also revised upwards the level of both nominal and real GDP by about 17 percent in 2016–17. These revisions result from the introduction of a new methodology that implements: a) the UN’s 2008 System of National Accounts (2008 SNA) and the 2010 European System of Accounts (ESA 2010); and b) statistical improvements on data gathering and compilation methods. The revisions were undertaken in collaboration with Fund technical assistance. New information and further revisions are expected in coming months as the NBS proceeds to fully implement the new methodology. Fund staff are in close contact with the NBS and will provide additional information in the context of the next review.

Republic of Moldova: Third Reviews under the Extended Credit Facility and Extended Fund Facility Arrangements and Request for Modification of Performance Criteria – Press Release; Staff Report; and Statement by the Executive Director for the Republic of Moldova
Author: International Monetary Fund. European Dept.