15th April 2023, Skopje – Fitch Ratings revised North Macedonia’ outlook to stable from negative, confirming the sound policies the Government implements
The Agency noted that demonstrated resilience by the economy to the global pandemic and spillovers from the war in Ukraine, as well as macroeconomic stability maintained through adherence to a credible and consistent policy mix underpinned by the longstanding exchange rate peg to the euro, contributed for affirming North Macedonia’s credit rating at BB+, revising the outlook to stable from negative.
Revised outlook to stable from negative is of exceptional importance for North Macedonia, since it confirms the sound policies implemented in times of global price and energy crisis.
As noted in the Report, general government deficit narrowed to 4.5% of GDP in 2022 from 5.4% in 2021, as the key factor for the stable outlook. Fitch expects the deficit to additionally narrow, reaching 3.2% of GDP in 2024, owing to the reduced energy-support spending, tax adjustment measures and a reviving economy.
According to Fitch, IMF support through the Precautionary and Liquidity Line will have a positive effect to strengthening the fiscal consolidation, which would contribute to narrowing the budget deficit and stabilizing the public debt.
Furthermore, Fitch expects easing of food and energy prices to cut inflation to 4.1% in 2024.
Fitch also noted that the EU accession process helps anchor policy and support exports and FDI inflows, a factor leading to country’s rating being upgraded.
Credit rating has a positive effect on the decision-making as regards investing in a particular country, further contributing to boosting the economic growth, strengthening the export, increasing the employment and higher wages.
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