26th January 2024, Skopje – Boosting growth in 2024, driven by the planned public investments, notably the commencement of construction of Corridor 8/10d road sections; inflation declining gradually; attained fiscal targets; public debt outlook remaining sustainable and in accordance with the fiscal rules under the adopted Organic Budget law, as well as settlement of liabilities in a timely manner, budget deficit lower than projected – these are the conclusions under the published IMF Staff Report for the 2023 Article IV Consultation and the First Review under the Precautionary and Liquidity Line Arrangement.
The Report states that 2024 Budget, adopted by the Parliament, projects a lower budget deficit (equivalent of 3.4% of GDP) and gives recommendations as to the continuation of fiscal consolidation which aims to bring the budget deficit closer to the 3% of GDP ceiling under the Organic Budget Law. Recent increases in the size of the budget for capital expenditures are welcome and should be preserved going forward. In addition, the IMF also noted the importance of building buffers to respond to risks and target support to vulnerable households in order to address the energy crisis. Wage-related expenditures are to be contained as per the agreed in the General Collective Agreement, while cautiousness in spending during the election period is to be maintained.
IMF staff projects the economy to expand by 2.3% in 2023 and by 3% in 2024, with domestic demand and scale-up in public investments being the driving force behind it. Reforms aimed at boosting investments, productivity, green transition and arresting emigration are crucial for providing sound and sustainable growth, supporting the country on its path towards EU, which is to be accomplished by improving the business environment, rule of law, and tackling informal economy.
According to IMF, risks are mainly related to geopolitical tensions, commodity price volatility and forthcoming elections.
Within the scope of the IMF Mission, which took place in the period between 31st October and 1st November 2023, the First Review of the Precautionary and Liquidity Line (PLL), as well the 2023 Article IV Consultation, were conducted. In view of this Mission’s conclusions, the authorities are given access to EUR 200 million under the PLL, being approved by IMF Executive Board. Article IV Consultation takes place at regular annual intervals.
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