Macedonia’s economy recovered significantly since 2017 and positive movements are emerging supported by private investments and consumption. Growth this year is projected at 2.5 percent, next year at 2.9 percent and at 3.2 percent in 2020. These projections can be affected by interruption of the reform process by election cycles and failure to realize fiscal consolidation.
This is the assessment of the World Bank in its Regular Economic Report for the Western Balkans, presented Thursday in Skopje.
Macedonia made the biggest progress of all six Western Balkan countries, according to Marco Mantovanelli, World Bank Country Manager. Gradual growth is expected by 2020, however projections are based on acceleration of the EU accession process and the reform momentum. The World Bank follows developments and it will be taken into account in upcoming projections, it was noted.
If there is political instability and insecurity, Mantovanelli said, if it has a minimal impact, accompanied by an accelerated dynamic of reforms process, then Macedonia will remain on the path of positive growth. If political instability is prolonged, there are risks that might hamper this trajectory.
Every country goes through its own political processes, according to him, and this one is very important for Macedonia, because it is a critical moment.
In the short term, Macedonia should focus on stabilizing its public debt, which rose to 49 percent this year.
According to him, it’s a good thing that deficit was reduced this year, which paves the way for productive investments in human capital and a lesser need to finance deficit by borrowing again.
The World Bank recommends structural reforms focused on creating an environment for a productive competitive private sector and investing in human capital.
Public debt is expected to reach 50 percent this year, it is expected.
Furthermore, unemployment rate dropped, which according to Mantovanelli is positive news, and is expected to drop further to a historic low of 20.4 percent.
