Page 53 - SE Outlook Regions 2022

Current account balance (% of GDP) -0.9 -0.1 -3.3 -3.5 -3.4 -2.6

Official FX reserves (EUR bn) 2.610 2.336 2.867 3.263 3.360 3.643 ?

Gross foreign debt (% of GDP) 73.4 73.0 72.7 79.9 82.6 81.2

Source: IMF, World Bank, statistics office

2.8.1 GDP growth

North Macedonia’s government projected economic growth of 4.6% for
2022, with gross investment increasing by 8.5%, following projected
growth of 3.9% in 2021. The central bank expects GDP growth for both
2021 and 2022 of 3.9%.

In the medium term, the central bank projected further recovery of
about 4% per year. This growth dynamic will enable compensation of
the economic losses from the coronacrisis and exceed the
pre-pandemic level during 2022.

However, the central bank said there are risks related primarily with the
further development of the COVID-19 pandemic and the appearance of
new variants, which requires careful monitoring of the economic
developments. The implementation of structural reforms is extremely
important, because they are a prerequisite for sustainable and higher
economic growth, the central bank said.

The International Monetary Fund (IMF) upgraded its forecast for North
Macedonia’s GDP growth of 4.2% for 2022, up by 0.2 pp from the
previous forecast and sees a growth of 3.6% in 2026.

According to the European Commission, North Macedonia’s economic
recovery is making good progress, as both domestic and foreign
demand are strengthening. The upswing is expected to gradually
solidify in 2022 and 2023, based on a further firming of private
consumption and foreign demand.

According to the Fitch rating agency, the negative outlook reflects
moderating but still material downside risks to the growth outlook,
including the evolution of the pandemic, and path of public debt,
together with uncertainty regarding the consistency of the government's
fiscal consolidation strategy.

53 SE Outlook 2022 www.intellinews.com