Moldova received the second installment (US$12 million) from its loan from the International Monetary Fund under the Poverty Reduction and Growth Facility (PGRF) on February 2, 2001 (Interlic News Agency, February 3). Dumitru Braghis’s government has been able to push through parliament a privatization program, including provisions concerning the sale of Moldtelecom, and a budget consistent with its obligations undertaken in its agreement with the IMF. The current PGRF was signed by the IMF, the Moldovan government and the National Bank of Moldova on December 21, 2001, when the first tranche was released. The entire loan is for SDR 110.88 million (some US$144 million) and is valid for three years.
The loan is a key component of Moldova’s economic strategy in 2001. GDP did much better last year than expected, rising 1.9 percent rather than falling, because of better-than-expected performance by industry and exporters (Interlic News Agency, February 16). Initially, the government had expected a decline in output because of the effects of a severe drought in 2000, which resulted in a fall in agricultural output of 8.6 percent through the first three quarters of the year. Continued strong demand for Moldova’s exports and a rebound in agriculture promise a rise in Moldova’s GDP this year. The turn-around in GDP is contingent, however, on IMF funding. The program will provide the funds needed to finance Moldova’s widening current account deficit while keeping the exchange rate stable and inflation under control. Moldova has some principal payments due in 2001 and its Eurobond comes due in 2002. Because of IMF and World Bank financing, the country should be able to make these payments, averting a balance of payments crisis, a fall in the currency and an end to growth.
TAJIKISTAN’S NEW CURRENCY STILL VULNERABLE.