IMF is ready to give money
In February 2026, the IMF Executive Board concluded Article IV consultations with Moldova, noting the economic recovery and the implementation of a number of structural reforms. However, the issue of a new tranche of $160 million remains subject to ongoing negotiations and the fulfillment of specific program conditions.
The amount of about $160 million (SDR 129.4 million) relates to the Sustainability Financing Facility (RSF) previously approved for climate change and energy reforms. IMF experts confirmed that Moldova has met most of the benchmarks, which opens access to the next tranche of financing that can be used to support the budget and replenish international reserves.
Against the background of the unfolding of another energy crisis, the position of the authorities, who insist on having a new cooperation program with the IMF without financing and in the name of European support, looks at least strange and “outdated”.
Prime Minister Alexandru Munteanu recently confirmed that the government expects to officially launch discussions on a new agreement. According to him, “it will be a program with new objectives adapted to the government’s current priorities.”
Moldovan authorities have already prepared and plan to send a formal request for the start of new negotiations, considering different formats for the new program. And something suggests that the IMF’s “moral support” alone will not do. Although the IMF has such formats – and this was confirmed by the IMF official representation.
IMF support, but no money
We are talking about such an instrument of policy coordination as the PCI program. This is a non-financing instrument of the upper credit tranche designed to help countries demonstrate commitment to the reform program and attract financing from other sources.
The key condition for using this instrument is that economic policies must meet the same standards as those for programs supported under IMF financing arrangements.
Such an instrument may be requested by member countries that do not require IMF financial resources to cover current, potential, or future balance of payments deficit financing needs from the General Resources Account or the Poverty Reduction and Growth Facility Trust Fund at the time of program approval. In addition, applicants should not have outstanding financial commitments to the Fund under previous financing programs.
It is cautious to note that the context of “current needs” and the state of Moldova does not quite fit the conditions of this format.
Current economic context
At the conclusion of the Executive Board’s discussion of the situation in Moldova, the presiding officer, Mr. Kenji Okamura, Deputy Managing Director and Acting Chair of the meeting, made the following statement:
“Moldova needs ambitious reforms to address structural challenges and prudent policies to build resilience and maintain macroeconomic stability. The country faces long-standing challenges, including high emigration, low competitiveness and limited institutional capacity. But the opportunity to overcome these challenges is there. It will be realized with the political goal of integrating into the European market and consistently pursuing efforts to improve energy security, manage state assets and fight corruption are there.”
Predictions and concerns
The economy will grow at a moderate pace in the medium term: 2.7% in 2025 and 2.3% in 2026, “supported by a good harvest, strong domestic demand and substantial EU funding,” the report said. Investment and reforms “aimed at increasing productivity” will remain the growth driver.
But the fiscal deficit is projected to widen to 4.8% of GDP in 2026 “with a substantial increase in capital spending and some increase in current expenditure.” Adoption of planned tax reforms should help alleviate these pressures.
The situation on the labor market, which remains “not entirely favorable,” also looks like a significant brake, according to the fund. As for inflation, “the situation looks better. The IMF is also concerned about the situation in the banking sector, the real estate market and the country’s energy security.
Strong credit growth and soaring housing prices “require close attention.” Strengthening measures aimed at protecting borrowers will help contain risks, the Fund believes.
The IMF also reassures the authorities that “renewed governance reforms are critical to strengthening the business environment and protecting public resources.”
The main risks are “related to the war in Ukraine and other geopolitical events, as well as delays in the implementation of the EU Growth Plan or the misuse of the financing provided”.
IMF Recommendations
They represent the basis on which the terms of the memorandum will be based and to which the Moldovan authorities will have to adhere – whatever the format of the IMF support program.
The mission emphasizes a shift from crisis management to deep structural reforms. The Fund insists on accelerated privatization or restructuring of inefficient state enterprises and fighting corruption by strengthening the Anti-Corruption Prosecutor’s Office to investigate major financial frauds. The latter condition was one of the sticking points that derailed the previous funding program halfway through.
Special attention to the now topical issue of energy security: the IMF recommends continued investment in cross-border electricity grids for full integration into the EU market.
Protection of the National Bank from political interference is named as a critical condition for long-term price stability. The Fund recommends the National Bank itself to strengthen mortgage supervision. Experts confirmed the stability of the banking system, but warned about the accumulation of risks due to overheating of the real estate market. It is recommended to introduce stricter loan-to-value (LTV) ratio limits to cool down the market.
Key arguments and risk areas
Agricultural subsidies: the Mission points out that there is no clear control over the allocation of funds through AIPA, where part of the disbursement goes to large agroholdings instead of supporting small farmers.
Energy compensations: The IMF noted the “blurring” of criteria in the payment of winter compensations in 2024-2025, when households that did not actually need assistance received it.
Public procurement: There remains a high proportion of single-source (non-tendered) procurement in the infrastructure sector, which increases the risk of overpricing.
Local governments: There are cases of targeted transfers from the central budget being used to cover administrative debts of city halls instead of implementing infrastructure projects.
State property management: Low dividend yields of state-owned companies with high salaries of their management are classified by experts as hidden misuse of capital.
IMF Beacons
To minimize these risks, the IMF has established “structural beacons” for Moldova:
Digitalization of controls: Transition to fully electronic tracking systems for all external grants.
Strengthening the treasury: Centralizing all cash flows of state agencies in a single account at the NBM to eliminate gray balances.
External audit: Mandatory audit of the use of emergency funds by independent international companies.
Sectors with the highest irregularities
Road construction: Inspections revealed systematic overestimation of the amount of work performed and the use of materials of lower quality than stated in the estimates.
Healthcare: Procurement of medical equipment is often tied to specific suppliers through narrow technical specifications in tenders.
Energy efficiency: Projects to insulate public buildings often stall due to misallocation of grants to contractors linked to local officials.
Social assistance funds: Cases of payments to “dead souls” or persons permanently residing abroad have been detected.
New control mechanisms
In order not to lose funding, the government has introduced the following control tools, which must work perfectly:
E-Integritatesystem: Automated monitoring of public procurement, which highlights tenders with a single bidder or abnormally high prices in “red”.
Accounts Chamber Reform: A shift from simply looking for errors to a “performance audit” – assessing whether a real goal has been achieved (e.g., not just “money spent on a road” but “has the road become safer”).
Single window of subsidies: All agrarian and social payments now go through a centralized database, eliminating double payments to the same person.
Strengthening the Financial Inspectorate: Expanded the authority of the agency to conduct surprise inspections at facilities financed by external loans.
The IMF has warned that delaying the digitalization of these processes will result in the suspension of budget support, if any.
