1st April 2026, Skopje - The International Monetary Fund welcomes the Government’s commitment to fiscal consolidation, including its objective to reducing the budget deficit to 3.5% of GDP in 2026. This is highlighted in the IMF’s Concluding Statement following the official mission undertaken as part of the regular consultations under Article IV, conducted over the past two weeks, emphasizing the importance of building fiscal buffers to better withstand the shocks.
According to the IMF, fiscal consolidation should continue over the medium term, with the budget deficit reduced to 2% of GDP by 2030. On the revenue side, they note that further gains could be achieved by reducing VAT tax exemptions, strengthening the tax administration, reducing the informal economy, etc.
According to the IMF Mission’s Concluding Statement, the country recorded a robust growth and a decline in inflation in 2025. Growth accelerated to 3.5% in 2025, driven mainly by construction-related investments and strong private consumption amid wage and credit growth. Headline inflation declined from the peak of 4.8% in July 2025 to 2.9% in February 2026. The IMF expect for the energy price shock stemming from the ongoing war in the Middle East to weigh on growth and slow the economic activity, as well as reignite inflationary pressures, keeping inflation higher for longer. Real GDP growth is projected to slow to 3.1% in 2026 and converge to its estimated potential of 3% over the medium term. Stronger reform implementation could significantly improve the country’s growth prospects. As noted in the Concluding Statement, structural reforms can lift productivity, strengthen competitiveness and support faster income convergence with the European Union. They underscore that energy sector reforms are critical to ensure energy security and affordability, supported by investments in energy infrastructure and renewables.
The International Monetary Fund Mission took place from 18th to 31st March 2026. Consultations under Article IV of the IMF’s Articles of Agreement take place at regular annual intervals.
