Moscow  - As he steps down Wednesday, President Valdimir Putin is credited with a booming economy in Russia and Moscow's resurgence on the world stage.

But Putin's successor-elect, Dmitry Medvedev, untried in foreign policy, has some hefty diplomatic wrestling ahead and will have to face down major economic issues to keep up Russia's growth to fit with its ambitions to join the WTO.

Below are some of the international and economic quandaries facing Medvedev when he is inaugurated on Wednesday:

NATO EXPANSION

While Russia won a victory opposing Ukraine and Georgia's accession to the Western military alliance last month in Bucharest, NATO leaders promised Russia's post-Soviet neighbours eventual membership.

Russia has chronic disputes with both states and it resents NATO's bid to set up camp along its borders as a security threat.

MISSILE DEFENCE

Russia's next president will have to continue tense rounds of talks with his US counterpart over Washington's plans to locate a missile defence system in Eastern Europe.

Washington's attempts to placate Moscow's security fears of spying on its nuclear capabilities have hit a deadlock. The Bush administration claims the shield is necessary to protect against "rogue states" such as Iran.

EU-RUSSIAN RELATIONS

Russia's poor relations with its post-Soviet neighbours, who have been welcomed into the European Union, have soured its relations with the economic bloc.

While the EU constitutes Russia's largest trading partner, the path to a new strategic partnership agreement to replace the expired one has been repeatedly vetoed by new EU member states rankled by energy, trade and human rights.

The next EU-Russia summit is scheduled for the end of June.

WTO ACCESSION

Russia has been bidding to join the World Trade Organization (WTO) for over 10 years. But while membership is within reach, the above diplomatic rows, piracy and refusal to lower tariffs on key goods have halted its membership process.

INFLATION

Inflation has rocketed along with soaring commodity prices, and the government is struggling to keep it below an official target of 8 per cent. In 2007, according to official statics, inflation was at 12 per cent.

Part of the problem is that conventional inflation-fighting measures, such as ruble appreciation, are not effective, leaving the government with few tools to combat the problem in the face of rising public discontent that saw protests by over 10,000 people on May Day.

REFORMING ENERGY PRICES

State-owned energy monopoly Gazprom has long planned to raise artificially low gas prices on the domestic market and in several former Soviet Commonwealth of Independent States (CIS) members, But such increases are unpopular and difficult to push forward.

DIVERSIFYING THE ECONOMY

Russia's economic growth is largely dependent on high oil windfalls, and the government has called for economic diversification into other sectors to secure long-term growth and protect against a sudden drop in oil prices. (dpa)