Skopje, 5 February 2024  

The Governor Angelovska Bezhoska participated in a panel discussion at the twenty-second edition of the prestigious Warwick 2024 International Economic Summit, which is being held at the eponymous university in the United Kingdom. The panel discussion titled Navigating Monetary Policy: Perspectives from Central Banks Around the World, in addition to the Governor, was also attended by the Governor of the Croatian National Bank, Boris Vujčić, the Governor of the Bank of Mauritius, Harvesh Kumar Seegolam, the former Governor of the Central Bank of Malaysia, Nor Shamsiah Mohd Yunus, as well as the former member of the Monetary Policy Committee of the Bank of England and distinguished professor Charles Goodhart, and the panel discussion was chaired by the Frankfurt Bureau Chief at Financial Times, Martin Arnold. The Governor also met with students from the University of Warwick within the event Students Meet Leaders.

“The acceleration in convergence will depend on structural reforms related to human capital, investments and institutions, but also on technological, climate and geopolitical conditions”, said the Governor of the National Bank, Anita Angelovska Bezhoska, speaking at the panel discussion. The convergence of the Macedonian economy in the last few years lags behind, due to several factors, at the level of 40% of the income in the European Union (EU), which is similar to other economies in the Western Balkans. Assuming that the Macedonian economy will grow at an average GDP growth rate of 5%, and the EU economy at a rate of 3%, we will need 40 years to achieve the EU income level.

The several crises that occurred in recent years adversely affected growth and convergence. “In accordance with the analyses made in the National Bank for the period 2020 - 2024 it is estimated that the growth of the Macedonian economy is smaller by about 10 percentage points (p.p.), compared to the forecasts before the pandemic, while the convergence that would be achieved in the absence of crises would be higher by about 5 percentage points than the current one”, the Governor said. However, she emphasized that the slow convergence cannot be explained only by the recent shocks, because there is a slowdown even before the pandemic. This is due to cyclical and structural factors, taking into account that the region’s growth potential in the last two decades is halved from about 5% to 2.5%, while that of the country from 3.1% to 2.3%, compared to the EU where it is from 2.9% to 1.8%.

Angelovska Bezhoska states that the acceleration in the potential and real growth in the region is due to the slowdown in the total productivity of the output factors, i.e. smaller growth based on technology and innovations (about half of the EU average), but also to the labor factor, where the unfavorable demographic movements and migration reduced the active population (65%, compared to 70% in 2010). The Governor also underlined the importance of the capital factor and said that although there is a rapid growth of investments, they are still low. The further dynamics of convergence will depend on the intensity of structural reforms, but also on the external environment, and especially on the risk of geoeconomic fragmentation.