Policy adjustment needed as political noise fades
Overview:
Violence following recent parliamentary elections has subsided but political noise remains high. There is little doubt that the Communist Party is the most popular party in Moldova but also that a significant minority is unhappy about its re-election. A new president will be elected in coming weeks although the outgoing one (Vladimir Voronin) will likely remain the key player on the political scene as Communist leader. As the new administration is formed, however, it will face a number of significant challenges. Economic growth is slowing and the fiscal deficit overshooting. Some sort of policy adjustment will be necessary to ensure macro-economic stability and a restarting of the IMF program. Further implementation of economic reforms would help to maintain FDI inflows and productivity growth.