North Macedonia should stay on path of reform, IMF says

North Macedonia should continue on the path of reform to further bolster the economy’s resilience to shocks and durably increase incomes, the International Monetary Fund (IMF) said on Monday.

After a temporary slowdown in 2017, growth recovered in 2018 (2.7 percent) and is expected to strengthen further this year (3.2 percent), driven by strong domestic demand and robust export growth despite the global trade slowdown, the IMF executive board said in a statement upon concluding the 2019 Article IV consultation with North Macedonia.

“With strong determination, the authorities have revived the reform momentum in recent years,” the IMF noted.

The economic growth is expected to accelerate to 3.4 percent in 2020, reflecting a temporary boost from the 2020 budget and higher wages, the Fund said, adding that reforms to address key labour market and institutional weaknesses will help lift medium-term growth and speed up income convergence.

The IMF staff expect the fiscal stance to ease in 2020, the Fund said, adding that re-orienting public spending toward investment would strengthen medium-term growth prospects.

“On a preliminary basis, staff projects the fiscal deficit to widen to 2.5 percent of gross domestic product (GDP) in 2020, from 1.8 percent in 2019,” the IMF added.

The IMF also said that reforms to tackle informality will help improve the business climate and protect workers, with potential large revenue gains.

Source: See News