Ion Chicu: Burden of servicing state guarantees to central bank could be reduced

Prime Minister Ion Chicu said the Government’s burden as regards the servicing of the state guarantees issued for covering the bank fraud could be reduced and about 600-700 million lei would be saved this way.  The National Bank and the Ministry of Finance are to design a relevant mechanism. The issue was discussed in the recent meeting of the Supreme Security Council, IPN reports.

“A very important decision taken by the Council envisions the steps that will be taken to reduce this burden on the budget,” Ion Chicu stated in the talk show “Key issue” on NTV Moldova channel. He noted the Government now pays about 1.3-1.4 billion lei yearly for servicing the state guarantees. “Half of the sum is the main part of the debt and the other half is the interest. We agreed that the National Bank and the Ministry of Finance will shortly suggest a mechanism to spare the Government from such large costs, at least those related to debt servicing. I’m sure we will identify such a mechanism.”

The Premier said the current Government intends to give an impetus to the economy in 2020 so that the economic growth in 2021 reaches 9-10%. The objective can be achieved by making serious investments into infrastructure and such a measure forms part of the Government’s plans. “Next year we want to add infrastructure projects to the value of about US$ 300 million to the budgeted 4 billion lei. This means 5.3 billion lei more. We already included in the budget a part of his sum. Immediately after the draft budget is published in the Official Gazette, expectedly on December 20-21, we will launch the public procurement process that lasts for 70-80 days.”

Ion Chicu expects the process of choosing most probably foreign companies that will develop infrastructure will end next March. The documentation for repairing several sectors totaling about 350 km of road is available already.

These investments in infrastructure will increase Moldova’s foreign debt from 25% to 32% of the Gross Domestic Product. “Instead, we will have good roads. If we don’t do this, we will anyway reach the figure of 35% of the foreign debt in five years and will not have infrastructure, but will use up loans,” stated Premier Chicu.

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