Republic of North Macedonia: 2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Republic of North Macedonia

International Monetary Fund

No 2020/024, IMF Staff Country Reports from International Monetary Fund

Abstract: This 2019 Article IV Consultation with Republic of Macedonia discusses that after a protracted political crisis, the economy has entered a period of solid growth and stability. Over the recent years, the authorities have reviewed the reform momentum, with crucial institutional and governance reforms and efforts to make public finances more sustainable and equitable. Growth is expected to accelerate in 2020. Lower taxes and higher pensions and wages?including public sector and minimum wages?are expected to provide a further, albeit one-off, stimulus to consumption. Export and investment growth would remain robust but slow somewhat, reflecting weak growth in trading partners. An ambitious consolidation is needed to rebuild fiscal policy space and re-orient public spending toward investment. Reforms to address key labor market and institutional weaknesses will help lift medium-term growth and speed up income convergence. Although growth has been solid in the past two decades, it has not been enough to substantially narrow North Macedonia’s large income gap with the European Union. In order to accelerate convergence, it is essential to continue reforms to improve the public administration, rule of law, and control of corruption.

Keywords: ISCR; CR; staff appraisal; lower-than-projected inflation; baseline projection; deficit outcome; rate; staff's assessment; Minimum wages; Capital spending; Income; Wage adjustments; Global; debt data; growth-enhancing fiscal policy mix; executive board assessment (search for similar items in EconPapers)
Pages: 75
Date: 2020-01-27
New Economics Papers: this item is included in nep-mac
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