OREANDA-NEWS. July 12, 2012. The Summary Intellectual Index, research by the independent analytic centre, runs that since September, 2011 Moldova has seen economic slowdown caused by the standstill states of the region have been deadlocked in.

The less demand for Moldovan goods, tension in the labour market in EU, reduced inflows f direct investments have become main channels external shocks are penetrating in Moldova. The economic slowdown may continue in the nearest future and will increase pressure on the public finance system. The decline of the demand has already triggered regular non-fulfilment of a budget receipts target since the beginning of 2012.

To control the budget deficit the government was forced to revise the Budget Law for 2012, cut expenditures and reduce revenues. However, even after such a tough measure keeping public finance on track remains a great challenge for Moldovan authorities. This was provoked by a very optimistic projection of the economic growth of 3.5% for 2012.

A decline of the economic activity makes economic agents refuse or delay investment projects, the research says. Besides, the decrease of the employment rate and incomes led to companies’ cutting jobs and wages. Experts think it necessary to implement structural reforms to smooth fallouts of the regional economic crisis and unblock the potential of Moldova.