Republic of Moldova: Staff Report for 2023 Article IV Consultation, Fourth Reviews Under the Extended Credit Facility and Extended Fund Facility Arrangements, Request for Extension and Rephasing of the Arrangements, and Request for an Arrangement Under the Resilience and Sustainability Facility-Press Release; Staff Report; and Statement by the Executive Director for Republic of Moldova

This paper presents Republic of Moldova’s 2023 Article IV Consultation, Fourth Reviews under the Extended Credit Facility (ECF) and Extended Fund Facility (EFF) Arrangements, Request for Extension and Rephasing of the Arrangements, and Request for an Arrangement under the Resilience and Sustainability Facility. Moldova continues to grapple with persistent challenges from spillovers of Russia’s war in Ukraine. ECF/EFF implementation remains strong despite these challenges, with completion of important reforms related to fiscal governance, financial sector oversight, and the rule of law. Contingency plans have alleviated the effects of the energy crisis, with progress in diversifying energy sources and enhancing protection for the vulnerable population during winter months. Inflation decelerated rapidly due to timely monetary responses, declining food, and fuel prices. Moldova faces ongoing challenges related to spillovers from Russia’s war in Ukraine. Policies are appropriately focused on crisis mitigation and recovery; as risks abate, policies should align with long-term development goals while ensuring fiscal sustainability. Ongoing institutional and policy reforms will contribute to boosting medium-term, sustainable growth.