Skopje, 24 November 2022

"A global shock affects all economies, but the domestic structural factors in each of the economies determine the intensity of inflation... Import dependence and the level of trade openness of our economy are significantly higher compared to the European Union. Openness and import dependence reflect on import and its structure, further on the structure of consumption and consequently, on domestic prices. These structural factors largely explain the difference between the domestic inflation and the inflation in the euro area”, said Aneta Krstevska, Chief Economist of the National Bank, who presented the latest macroeconomic forecasts to the business community, at the Conference of M6 Educational Centre under the title of “A step forward - the Macedonian economy in a double shock - where are we going?”. 

She emphasized that the further geopolitical tensions arising from the military invasion over Ukraine, in circumstances when the world still suffers the consequences from the pandemic, deteriorated the global environment, adversely affected the economic outlook and created further pressures on the world prices of primary products. Central banks around the world responded by tightening the monetary policy due to the intensified and longer-term growth of inflation worldwide, which is reflected on the terms of funding.

“The global developments were also reflected on the domestic economy, through a lower growth compared to the April forecasts. Inflation for this year has been revised upwards, given the higher current performances, but it is important to point out that next year the inflation rate is expected to slow down, and will equal 8 - 9 % in 2023, amid gradual reduction of the price pressures from import prices, subsidizing of the price of electricity for the food industry and tightening of the monetary conditions”. Krstevska underlined that according to the National Bank forecasts, inflation will continue to stabilize, reducing to the level of 2.4 % and 2% in 2024 and 2025. 

Before the business community, she explained all the measures taken so far by the National Bank in terms of inflation, through several instruments. Furthermore, Krstevska stressed that the approach of gradual, but continuous tightening of the monetary policy already gives effects in certain segments, and further effects are also expected, to the extent that is possible in case of this type of inflation - cost inflation. “The National Bank is determined in dealing with inflation and inflationary pressures, taking into account that price stability is a basic prerequisite for economic growth” - Krstevska said.   

At the Conference held within the project “М6 A step forward”, the representatives of the institutions and the business sector discussed the short-term and the medium-term challenges for the Macedonian economy.