Economic Growth in North Macedonia: A Promising Outlook

Strategic Insights -

According to the National Bank of the Republic of Macedonia, economic growth in the country is expected to reach three percent in the current year, with medium-term forecasts pointing to a growth of about four percent. The main driver of this growth will be investments, supported by a public infrastructure cycle, foreign investments, and solid credit support to the corporate sector. Foreign direct investments have reached a high level of about seven percent of GDP, while the credit market has reported increased credit support to companies, boosting household disposable income and credit financing of household consumption.

Key Takeaways:

  • The National Bank of the Republic of Macedonia expects economic growth to reach three percent in the current year, driven by investments, foreign direct investments, and credit support to the corporate sector.
  • Foreign direct investments have reached a high level of about seven percent of GDP, contributing to the overall economy.
  • The credit market has reported increased credit support to companies, boosting household disposable income and credit financing of household consumption.
  • The inflation forecast was revised upward, with a moderate correction expected for the current year due to stronger price growth in food products and import prices.
  • The Governor emphasized the importance of maintaining price stability through coordination with fiscal policy.
  • The country's membership in NATO and SEPA, as well as the new EU Growth Plan for the Western Balkans, are expected to have a positive impact on the economy in the medium term.

Statistics:

  • Three percent economic growth expected in the current year.
  • Four percent economic growth forecasted in the medium term.
  • Seven percent of GDP in foreign direct investments, the highest level in recent years.
  • Household disposable income and credit financing of household consumption have been continuously increasing.
  • Moderate upward revision of the inflation forecast, primarily due to stronger price growth in food products.
  • Two percent inflation forecast for the medium term, consistent with historical averages.
  • The spread in relation to the euro area inflation is expected to continue narrowing due to domestic inflation below euro area levels.

Sources:

  • National Bank of the Republic of Macedonia press release (date not specified)
  • Interview with Governor Trajko Slaveski for the Money portal (no date specified)