The Executive Board of the International Monetary Fund (IMF) concluded its second set of discussions surrounding the monitoring program with the Republic of Moldova on Dec. 8.
In their findings the IMF stated that output growth in the country is expected to decelerate in 2014 to approximately two percent. This is due to moderation of agricultural production, restrictions of exports to Russia and overall weakening of economic activity within the country's major trading partners.
Growth is expected to pick up roughly 3.5 percent in 2015. This can be attributed to recent free-trade agreement negotiations going into effect and the recovery of domestic demand. Inflation is expected to remain within target ranges put forth by the Moldovan Central Bank.
According to the IMF, weaknesses in fiscal discipline occurred leading up to the recent elections. The republic's fiscal position is likely going to deteriorate with budget deficits projected to expand to 5.4 percent of GDP.
They cite governance concerns of the banking system, and that if it continues the republic risks further economic instability.