Skopje, 23 May 2023
During the visit of the University Goce Delcev-Stip, the Governor of the National Bank, Anita Angelovska Bezhoska held a meeting with the Rector of the University, prof. Dejan Mirakovski PhD, and prof. Darko Lazarov PhD, discussing the possibilities for advanced cooperation between the National Bank and the University in the area of research and macroeconomic modeling. Within the regular practice for disseminating macroeconomic data to different target groups, the Governor held a lecture before the students of the Faculty of Economics at the University, where the Dean of the Faculty of Economics at the UGD, prof. Olivera Gjorgieva Trajkovska, PhD, and prof. Darko Lazarov, PhD also delivered their address. “The latest macroeconomic forecast of the National Bank expects narrowing of the current account deficit, reflecting the improved external environment by reducing pressures from trade, primarily in energy. The financial inflows would still be solid and cover the current account deficit, and at the same time they will be sufficient to increase foreign reserves. However, the uncertainty remains and vigilant monitoring is needed”, pointed out the Governor during her lecture.
The external sector developments are extremely important for the National Bank, given our monetary strategy of maintaining a stable exchange rate of the denar. Last year, the current account deficit significantly widened, mainly due to the energy crisis, i.e. the import of energy at extremely high prices. Part of these pressures were mitigated by the high growth of remittances. The remittances which were significantly affected during the pandemic, registered high growth rates of 30-40% in the past period, and hit the record high of euro 2.4 billion in 2022. They are expected to continue to grow in the medium term, yet more moderately with an annual growth of 3 to 4%. The expectations for reduced pressures on energy, and thus on the trade deficit, will contribute to narrowing of the current account deficit in 2023 by 2.4 percentage points of GDP on an annual basis, and it will reach 3.6% of GDP. This trend is also expected in the medium term in conditions of further gradual stabilization of commodities prices and further recovery of foreign export demand.
The financial net inflows in the period 2023 - 2025 would fully finance the current account deficit and would contribute to further growth of foreign reserves, which will remain at an appropriate level for the entire period. Last year, foreign direct investments reached 5.7% of GDP, one of the highest rates so far. They are expected to further grow in the following period, with a medium-term average of 3.7% of GDP.
In her presentation before the students, the Governor also referred to the expectations for the economic growth this year, as well as inflation. Discussing the economic growth, the Governor pointed out that the growth of the Macedonian economy in 2023 would amount to 2.1% (equal to the previous year), while the inflation would reduce to a one-digit level of 8% to 9% and then in the medium term it would further reduce below 3%, as in the October forecast.
Geopolitical turmoil and their possible effects on the supply chains and world prices, any stronger tightening of the global financial conditions, as well developments in the financial systems in certain economies remain risks for downward forecasts.