6th April 2024, Skopje – North Macedonia has a record of credible and consistent macroeconomic policies that underpin the longstanding exchange rate peg to the euro, more favourable governance indicators than peer medians, and an EU accession process that acts as a reform anchor over the medium term – these are the factors for Fitch Ratings to affirm the country’s credit rating at ‘BB+’ with a stable outlook.
As noted in Fitch latest Report, growth is expected to strengthen in 2024, budget deficit to narrow, with inflation dropping.
According to Fitch, growth is expected to strengthen to 2.9%, with private consumption as its main contributor owing to an improvement in real wages, work on the 8/10d highway project, and continued net FDI inflows. As per Fitch forecast, growth is expected to pick up further in 2025 to 3.6% as the prospects for country’s key trading partners improve. Financing flows from the EU’s new Growth Plan for the Western Balkans are an upside.
As noted in the Report, budget deficit is expected to narrow to 3.8% of GDP in 2024, owing to recent revenue-raising measures and a pickup in economic activity. Reduction of energy subsidies and adjustments to agricultural subsidies will narrow the deficit as well. The Government raised a record amount from the domestic market in 2023 and there is a solid pipeline of IFI financing.
Inflation normalized, dropping to 3% in February, forecasted to average 3.7% in 2024 and 2.8% in 2025.
Positive impact is also expected from the EU accession process and the reform implementation.
Credit rating of a country gives insight into the level of risk associated with investing in a particular country and it is one of the key indicators the potential investors consider when making decisions.
North Macedonia maintains its credit rating at ‘BB+’ with a stable outlook since 2019.
Country’s credit rating, as well as the policies it implements, are also rated by Standard&Poor’s, which, at the beginning of this year, affirmed the policies’ consistency and the efforts for fiscal consolidation and economic growth.
