Republic of North Macedonia: 2023 Article IV Consultation and First Review Under the Precautionary and Liquidity Line-Press Release; Staff Report; and Statement by the Executive Director for Republic of North Macedonia

International Monetary Fund

No 2024/026, IMF Staff Country Reports from International Monetary Fund

Abstract: This paper discusses Republic of North Macedonia’s 2023 Article IV Consultation and First Review under the Precautionary and Liquidity Line (PLL). The authorities are progressing toward PLL objectives, encompassing the safeguarding of public finances, reduction of energy subsidies, addressing high inflation, and ensuring financial stability. The economy is recovering post the surge in energy and food prices triggered by Russia's war in Ukraine. Economic activity in 2023 was driven by strong exports and reduced energy imports, and it is set to strengthen into 2024. Going forward, the authorities’ policy agenda focuses on continued fiscal consolidation to rebuild buffers. In this context, parliament has approved a credible 2024 budget that targets significant fiscal consolidation while preserving space for priority spending. North Macedonia faces significant medium-term challenges. Arresting emigration and boosting productivity are crucial for re-accelerating income convergence with the EU. North Macedonia is also exposed to climate change and will be impacted by the EU-Carbon Broder Adjustment Mechanism. Addressing these challenges requires among others improving the business environment and rule of law, and accelerating the green transition.

Keywords: PLL negotiations; inflation expectation; inflation risk; authorities' agenda; fund RELATIONS; authorities' ability; Inflation; Credit; Public investment spending; Global (search for similar items in EconPapers)
Pages: 133
Date: 2024-01-26
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=544112 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:imf:imfscr:2024/026

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Staff Country Reports from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().