Publication: Monitor Volume: 1 Issue: 131

Moldova is the first European CIS state to post economic growth since the collapse of the Soviet system. Addressing the parliament November 7, Prime Minister Andrei Sangheli reported that the country’s production slump has been stopped and reversed. Gross domestic product is projected to have grown 0.7 percent in 1995, the first growth year since 1989, mainly on the strength of agriculture and light industry; and is anticipated to grow by 7 percent in 1996. Sangheli also reported that the monthly inflation rate is down to 1.1 percent and National Bank currency reserves are up to $270 million, overfulfilling the International Monetary Fund’s requirements for Moldova in both categories; and that the national currency is one of the most stable among former communist countries in general. Acknowledging the importance of massive Western credits in sustaining Moldova’s radical economic reforms, Sangheli declared his Agrarian government’s resolve to continue the same policies. But President Mircea Snegur took the floor in rebuttal, asserting that the reported progress had inflicted too much hardship on the population. (14)

The IMF for its part projects 1.5 percent GDP growth for this year. The government’s report comes in the wake of protests by students and the pro-Romanian opposition demanding the Sangheli government’s ouster, and nonpolitical protests by the trade unions. Both streams pose inflationary and populist economic demands, but due to political differences, have not converged. Both have recently tried in vain to mobilize social support for their demands. Unless Snegur encourages such protests more openly than he has tried to do in his attempts to oust the Sangheli government, that government and the Agrarian party will be able to continue the reforms.