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NBRM Forecasts 2.5 percent Growth of Macedonia's Economy

The National Bank of the Republic of Macedonia (NBRM) in its April projection forecasts that Macedonia's economy in 2017 will grow by 2.5 percent, followed by a 3.2 percent acceleration in 2018.

NBRM's expectations remain unchanged over the level of inflation compared with October and expects increase in prices to gain momentum, i.e. a 1.3 percent inflation in 2017 and 2 percent inflation next year, Dimitar Bogov, Governor of the National Bank, told a news conference Thursday.

NBRM expects a reduction in deficit of the current account in the period 2017-2018, a lower deficit in goods and services, a mild growth in secondary revenue and an expansion of deficit in primary revenue. Deposits in the banking system are projected to grow this year by 4.2 percent and loans to grow by 5.6 percent.

The banking system remains stable, liquid and highly capitalized, according to the country's central bank.

"Key assumptions of April's projections include maintenance of sound foundations of the domestic economy, resumption of the negative impact of the political crisis on the confidence of consumers and investors and also the expectation for gradual resolution of the crisis by the year's end, stabilization of the environment and exhaustion of the damaging effects by the end of the year," Bogov said.

Explaining the change in risks between two projections, Governor Bogov said unfavorable risks in this cycle of projections were more visible compared to October. They are mainly related to domestic factors of 'uneconomic nature', i.e. the political crisis which has spilled well into 2017, and external factors such as uncertainty stemming from any consequences from Brexit, etc.

In its latest scenario, the central bank said favorable risks include strong positive effects from structural changes in the export sector of the domestic economy. Globally, it said, these risks involve speedy recovery of international prices of primary products, further improvement of financial considerations and fiscal stimulation in the United States.


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