The IMF said on
The GDP growth is expected to strengthen to 4% in the medium term with domestic demand remaining its main driver, the Fund said in a statement, adding consumption is expected to recover to some 3-3.5% growth.
The rebound in both private consumption and foreign direct investment will move up imports, therefore the contribution of net exports to growth will be somewhat limited. Yet, the weak credit growth, among others, could impede the rebound in private consumption and investment, the statement said. The broader risks institutions and investment, on the other hand, could arise from the continued uncertainty regarding the start of EU accession talks.
The growth estimates were made as part of a staff report, prepared by the Fund's stuff following discussions on economic policies with the Macedonian government that ended in
The IMF said in a statement that the board discussed as well the ex-post evaluation (EPE) of exceptional access under the 2011 precautionary and liquidity line arrangement (PLL).
Here is how the IMF has summarised the highlights of the staff report:
Context. Growth continues to strengthen, although the recovery is not yet broad-based. External and fiscal vulnerabilities have risen: private non-debt creating capital flows have slowed, and could leave the reserve path increasingly driven by an accumulation of external public debt; central government debt—although still moderate at a projected 36 percent of GDP—has increased by about 15 percentage points since the beginning of the global financial crisis, in the context of growing broader public sector operations.
Fiscal Policy. The newly re-established medium-term strategy is welcome, as it highlights the government's policy priorities and helps shape stakeholder expectations. The targets are consistent with a gradual withdrawal of stimulus, and would produce stable baseline debt dynamics. However, should private demand recover faster than expected, frontloading the consolidation would stave off the emergence of imbalances and would boost policy credibility. Ensuring adequate fiscal space for priority infrastructure remains key.
Monetary and Financial Policies.
External Position. Capacity to service outstanding external debt obligations, including to the IMF, remains adequate. Despite still weak net FDI flows, increased activity in large foreign-owned companies is contributing to stronger exports. However, backward linkages will likely develop only slowly. In the absence of domestic spillovers, the structural improvement in the trade deficit will be gradual and growth could be uneven.
Economic, debt indicators
Real GDP growth
Nominal gross public debt (%/GDP)
Public gross financing needs (%GDP)
Central govt balance (%/GDP)
C/A balance (%/GDP)
Public sector gross debt (%/GDP)
Nominal GDP (EUR bn)
Source: IMF - Second PPM,
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