Skopje, 6 December 2024 (MIA) — The Macedonian banking system, despite the crises, has strengthened its capital adequacy ratio; non-performing loans have fallen to a historic low; and its liquidity has remained solid and stable, which shows that the system has the capacity to provide support for economic growth, especially investments, National Bank Governor Anita Angelovska Bezhoska told a panel discussion held at the Banking Summit organized by the Association of Banks of Serbia in Belgrade.

According to a press release from the National Bank, Governor Angelovska Bezhoska said regonal banking systems overall had successfully coped with recent crises and provided financial support to their economies.

"However, access to finance needs to be improved and the credit activity level needs to continue rising," she said, adding that the share of credit in GDP in the Western Balkans ranged from 45 to 55 percent of GDP whereas in the EU it was over 80 percent of GDP.

Other panelists included Serbian National Bank Governor Jorgovanka Tabakovic; Croatian National Bank Governor Boris Vujcic; Central Bank of Montenegro Vice Governor Nikola Fabris; and Central Bank of Bosnia and Herzegovina Vice Governor Marko Vidakovic.

Panelists pointed out that despite successive crises, the convergence of the region toward the EU was ongoing, albeit at a slower pace.

According to Angelovska Bezhoska, if it had not been for the recent economic crises, according to the central bank's simulations, the convergence would have been 5 percentage points higher and the GDP would have been 8 percent higher at the end of 2024.

However, she said, if the Macedonian economy continued to grow at the average rate of GDP per capita, it would take 40 years to reach the EU income level – so she highlighted the importance of overcoming the existing structural obstacles to economic growth as soon as possible.

One of the factors for accelerating convergence, in addition to productivity and the labor force, was access to finance, Angelovska Bezhoska said.

Citing an OECD survey on regional convergence, she said access to finance was still a challenge for the region, especially access to alternative sources of financing. According to the IMF index, which measures not only the quantity but also the sophistication of financial intermediation, the central banker said the region was seriously lagging behind the EU.

Governor Angelovska Bezhoska said regional financial intermediation could be improved by stimulating domestic savings; channeling a portion of cash savings in euros into the financial system; increasing access to external sources of financing by attracting foreign direct investment into the financial system; increasing competitiveness, digitization and inclusion; diversifying sources of financing; and further integration into European financial systems, including the Single Euro Payments Area, which the country had already applied for and was looking forward to the relevant European institutions' approval. mr/