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In addition, elevated global volatility requires authorities to continue preserving fiscal buffers while ensuring spending is balanced between promoting economic growth and current expenditures, including transfers, the World Bank said.
Kosovo primarily engages in trade with European Union (EU) countries, constituting around 44% of its imports and 30% of its exports. Additionally, Kosovo maintains tariff-free trade with its Western Balkans neighbours through the terms of the Central European Free Trade Agreement (CEFTA).
3.6 External Environment - North Macedonia
The International Monetary Fund (IMF) said in November that the external trade balance has shown notable improvement compared to 2022, attributed in part to the substantial decrease in worldwide energy prices. This improvement, coupled with robust foreign direct investment, is bolstering international reserves, which are currently at satisfactory levels. Nevertheless, the outlook is not without its challenges, as evident risks include global geoeconomic fragmentation, escalating regional conflicts, and the possibility of fluctuations in global commodity prices.
North Macedonia’s foreign trade deficit narrowed by an annual 29.5% to slightly over €2bn in the first nine months of the year, according to preliminary statistics office data. In US dollar terms the deficit amounted to nearly $2.2bn.
Exports grew by an annual 1.4% to over €6.2bn, but imports declined by 8.4% to €8.2bn in the first nine months of the year. The most significant exported items were precious metal catalysts and ignition wiring sets, while the most imported items included petroleum oil, platinum and platinum alloys.
In terms of North Macedonia's foreign trade partners, Germany, the UK, Greece, China and Serbia were the most important countries for the country's total external trade volume. The coverage of imports by exports stood at 75.7%.
The risks from the external environment regarding future price movements remain unfavourable and uncertain, primarily due to the unpredictable nature of the conflict in Ukraine and, more recently, in the Middle East, serving as a new risk factor.
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