With the political crisis of the past two years in Macedonia now resolved, the new government should accelerate economic reforms and focus on areas such as improved fiscal management and measures to enhance social inclusion, the EBRD said.
"In light of the limited fiscal space, the government should revise legislation on concessions and public-private partnerships (PPPs), to encourage private sector involvement in the transport and energy sectors," EBRD said in its Transition Report 2017-2018 published on Wednesday, noting that the protracted political crisis has hampered reforms in Macedonia.
According to the report, greater access to finance for SMEs is needed to encourage Macedonian businesses.
In order to improve access to finance the country's government should revise factoring legislation, introduce reforms to improve lending in local currency, and covered bonds legislation.
"Both public and private investments have been delayed by uncertainty about the political situation, but short-term prospects are improving," the EBRD said.
"As a result, the 2017 forecast for growth is 1.5%, with a moderate increase to 2.5%in 2018 on the assumptions of political stability, the unblocking of further reforms and the arrival of much-needed investments. Downside risks have been mitigated by the improved political situation this year but the country is vulnerable to regional shocks and any resumption of political tensions."
