Skopje, 9 November 2023 (MIA) - Economic growth is to stand at 1.9% and inflation rate at 9.5% at the end of the year, National Bank Governor Anita Angelovska Bezhoska said at Thursday's presentation of the quarterly report with the central bank's autumn macroeconomic projections.

The National Bank forecasts growth of 3% and inflation of 3.5% to 4%, and in the medium term outlook, economic growth is expected to stand at 4% and inflation at 2% in 2025 and 2026, Angelovska Bezhoska said at the press conference.

According to Angelovska Bezhoska, the macroeconomic outlook regarding the economic growth and the slowdown of inflation for the whole period of the projections have not changed much compared to the April projections.

On the other hand, the external position of the domestic economy is evaluated as significantly more favorable compared to the previous projection, with less pressure on the current account, especially this year, and with solid financial inflows, which will allow maintaining the appropriate level of foreign exchange reserves in the medium term.

“The key risks for the basic macroeconomic scenario are similar to those from the April projections, while the risks from the external environment, both in the short and medium term, continue to be unfavorable. In this context, it is necessary to monitor the policies that affect aggregate demand in the domestic economy,” said Angelovska Bezhoska.

In terms of growth, a moderate slowdown in 2023 and its gradual strengthening in the next period is still expected. However, in conditions of a slightly less favorable external environment, in the short term, the recovery of the economy is a little weaker than previous expectations, Angelovska Bezhoska said.

The average annual inflation is expected to reach 9.5% in 2023 before falling to 3.5-4% in 2024.

The latest credit market forecasts in the banking sector are unchanged compared to the April projections, that is, the estimates of a slowdown in credit growth in 2023 and a gradual acceleration of growth in the next three-year period are maintained.

“The growth of loans by end of 2023 would be 5.7%. In the period ahead, stabilization of the lending activity is expected, at an average growth rate of 6.9% in the period 2024 – 2026. Further growth of deposits at a similar pace, so that according to the current forecasts it is expected that at the end of 2023 it will amount to 8.4%, higher than April projections,” Angelovska Bezhoska said.

For 2023, the current account deficit of the balance of payments would amount to 1.2 percent of GDP. The significant narrowing of the deficit results from the lower prices of energy and food, but also from the lower volume of imports of raw materials and energy, Angelovska Bezhoska said, adding that the foreign reserves throughout the entire period of the forecasts are maintained at the appropriate level, as a guarantee for the stability of the exchange rate of the domestic currency.

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