Skopje, 20 January 2024 (MIA) - The Republic of North Macedonia, strongly committed to implementing the ambitious reform agenda, has maintained macroeconomic and financial stability, achieved all the goals set and, according to the mission of the International Monetary Fund (IMF), continues to fulfill the criteria for access to the Precautionary and Liquidity Line (PLL), granted only to economies that have sound macroeconomic fundamentals.

According to the Ministry of Finance, this is the IMF's conclusion on Article IV and the First Review under the Precautionary and Liquidity Line (PLL) Arrangement for North Macedonia. The completion of the review gives the authorities access to USD 200 million, within the already approved package of a total of EUR 530 million in 2022 under the PLL instrument. The first tranche of EUR 110 million was withdrawn during 2022 and the withdrawal of the second tranche of EUR 155 million is expected, while the remaining amount is provided as a precautionary insurance against external shocks.

"North Macedonia is recovering from the dual shocks of the COVID-19 pandemic and the surge in energy prices following Russia’s invasion of Ukraine. Economic activity in 2023 was driven by strong exports and reduced energy imports, and it is set to strengthen into 2024. The planned increase in public investment, notably the commencement of the Corridor 8/10d road project, will further support economic recovery. Although inflation remains a challenge, it has moderated substantially," the IMF said. 

The IMF notes that the government has met its deficit target in 2023. 

"Planned fiscal consolidation for 2024 aims to bring the budget deficit closer to the 3 percent of GDP ceiling under North Macedonia’s Organic Budget Law," the mission adds. 

The PLL arrangement supports the country's policies in overcoming the uncertainty caused by high inflation, the Russian invasion of Ukraine and the energy crisis, and has an impact on ensuring financial stability.

The IMF Board approved the arrangement in November 2022, providing upfront access to EUR 530 million.   

The PLL was introduced in 2011 to meet more flexibly the liquidity needs of member countries with sound economic fundamentals and strong records of policy implementation, reads the Finance Ministry's press release.  

Photo: MIA archive