Skopje, 8 May 2025 (MIA) – The economy is showing gradual recovery from shocks, with income levels at around 42% of the European average. Structural reforms are key to accelerating income convergence and closing this gap, by boosting growth potential, which, over the past two decades, has nearly halved in the Western Balkans region, including in our economy, National Bank Governor Anita Angelovska Bezhoska said at the conference organised by the World Bank Office where report titled ‘Greater Heights: Growing to High Income in Europe and Central Asia’ was presented.

“Growth potential can only be increased through investment in human capital, where emigration poses a major challenge through investment in physical capital, which currently stands at about 30 percent of the European average, and through boosting productivity, which is around 50 percent of the European level,” Angelovska Bezhoska said.

“In regard to physical capital, increasing both private and public capital requires strengthening domestic investments and even more importantly, foreign investments, which would not only bring in new capital, but also new knowledge, managerial skills, and advanced technology. In this context, it is encouraging to see the public infrastructure cycle strengthening and foreign direct investment accelerating significantly, reaching 7.1% of GDP last year, one of the highest levels on record, despite rising geopolitical tensions and trade barriers,” she noted.

To boost productivity, it is very important to focus on innovation and technological development. In this regard, in line with its mandate, the National Bank continuously takes steps to support innovation in the financial sector.

“Over the past period, we established an Innovation Center that supports companies willing to invest in innovative financial activities. The first National Fintech Strategy was adopted, and a regulatory framework for executing payments was developed, paving the way for our accession to the Single Euro Payments Area (SEPA). This will bring numerous benefits to our economy, including more innovative business models and increased competition in the financial industry,” Angelovska Bezhoska said, adding that the use of digital technologies has the potential to boost productivity and ease some of the structural barriers to economic growth.

The conference featured remarks by the Head of the World Bank Office in the country, Massimiliano Paolucci, the EU Ambassador Michalis Rokas and the World Bank’s Chief Economist for the Europe and Central Asia region, Ivailo Izvorski.

The panel discussion featuring Governor Angelovksa Bezhoska also included addresses by Finance Minister Gordana Dimitrieska-Kochoska, Minister of Digital Transformation Stefan Andonovski and Viktor Mizo, Chairman of the Foreign Investors Council.

Photo: National Bank