​MOLDOVA TO KEEP STATE DEBT RATE AT 40% OF GDP – FINANCE MINISTER

In the program with the International Monetary Fund (IMF), Moldova adopted a very conservative approach in relation to the state debt.

In an exclusive interview to Banks and Finance Magazine, Finance Minister Octavian Armasu said that nobody is going to raise the state debt level.

“Its rate has been very strictly regulated and linked to the GDP. Our financial program is planned in a way that the state debt rate not to grow”, the Minister said.

At the question which is the chance that the state debt will astart falling or will be frozen, the Minister said that the size of state debt at the level of 40% of the GDP will allow the state to feel comfortable enough.

“We can service such level of debt, it will not feel like an excessive burden. At the same time, the state will be able to finance projects, create the necessary infrastructure and conditions for economic growth and GDP growth”, Armasu said.

As for the problem of considerable growth of debt in 2016 due to the transferring of Finance Ministry bonds to the NBM as execution of governmental guarantees on NBM credits to three banks, the Minister confirmed that the story with the stolen billion caused quite clear and justified reaction in the society.

“But we have to seek a way out of it. The fact that we agreed with the IMF the issuing and transferring to the NBM of bonds, promising to repay them in quite a long period of 25 years, seems a correct decision from pragmatic point of view. We had to do this anyway. Had we not done it, according to the Law on NBM, the bank would have forced the guarantor – the state – to repay this sum, but in 5 years, which is much more difficult for the budget”, the Minister explained.

According to him, everyone in Moldova should orient on economic growth.

“Our budget is quite small and narrow, which is our problem. If we achieve a considerable economic growth, Moldova will have more financial possibilities not only for state debt servicing, but also for financing economy development projects”, Armasu said, stressing that in such case the problem of covering the NBM bonds will not be so sharp.

With all this, the Minister pointed at the need of adopting measures and efforts to return as more stolen money as possible.

Infotag’s dossier: Currently, liquidators managed to return approximately 1 billion lei of almost 14 billion, provided to Banca de Economii, Banca Sociala and Unibank in the form of urgent credits for supporting their liquidity.