Skopje, 13 May 2024 (MIA) – National Bank Governor Anita Angelovska-Bezhoska announced Monday the possible start of monetary easing in the second half of the year, but only if, as she said, favourbale key factors persist.

“Risks exist, primarily within the global context; we observe geopolitical tensions. Of course, there are also domestic factors that necessitate a degree of caution, and for these reasons, we have not yet initiated monetary easing. Looking ahead, considering our strategy to maintain a stable denar exchange rate, two key factors will determine the timing of commencing the easing cycle: the level of foreign reserves (given the current favorable movement in the foreign exchange market) and inflation expectations. The third factor, of course, is the behavior of the European Central Bank. Generally, since the trends in the key points determining the scope of monetary policy are currently favorable, if these trends continue without any significant materialization of risks, there is room for the commencement of monetary easing in the second half of the year,” Angelovska-Bezhoska told reporters after presenting the latest macroeconomic projections.

In regard to the public debt and budget deficit, the Governor once again reiterated the need to continue fiscal consolidation.

"It's clear that there has been a notable rise in the budget deficit and public debt, particularly in the pandemic year in 2020. According to the latest data, public debt last year surpassed 60 percent of GDP. Fiscal consolidation is pivotal in such circumstances, and one of the crucial factors for its realization is a reduction in the budget deficit. We are seeing a certain trend of decreasing the budget deficit, and according to the medium-term fiscal strategy, it is anticipated that this trend will persist, aiming to reduce the deficit to slightly below three percent. According to us, it is crucial for fiscal consolidation to continue," Angelovska-Bezhoska noted.

Considering macroeconomic stability, she said it is important to also examine the new government’s vision for the medium-term fiscal path.

Photo/video: MIA