Republic of North Macedonia: 2026 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Republic of North Macedonia

International Monetary Fund

No 2026/123, IMF Staff Country Reports from International Monetary Fund

Abstract: The 2026 Article IV Consultation discusses that North Macedonia’s growth accelerated in recent years, but income convergence with the European Union has remained slow, while the renewed energy price shock poses new challenges for policymakers. The priority is to strengthen resilience to shocks, which requires coordinated monetary and fiscal policies to contain inflation and strengthen external and fiscal sustainability. Economic growth strengthened to 3.5 percent in 2025, driven by robust investment and private consumption amid tight labor market conditions. Inflation declined steadily through early 2026 but rose again in March, reflecting renewed pressures from higher global energy prices. Looking ahead, growth is projected to moderate to 3.1 percent in 2026 as the global energy shock weighs on activity, while inflation is expected to rise to 4.5 percent. Structural reforms are needed to boost productivity and offset the drag from emigration and population aging. Improving energy efficiency and accelerating the green transition are also critical to enhancing energy security, reducing vulnerabilities to energy price shocks, and supporting sustainable growth.

Keywords: policy framework; exchange rate arrangement; denar exchange rate; inflation expectation; FX Market operations; Inflation; Labor markets; Global; Middle East; Europe (search for similar items in EconPapers)
Pages: 77
Date: 2026-06-08
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