Skopje, 30 January 2024 (MIA) – The Republic of North Macedonia maintains its credit rating of BB- with a stable outlook, according to the agency Standard & Poor's, despite unfavorable external influences. The agency anticipates accelerated economic growth, a moderate level of public debt, and fiscal consolidation. Positive impact is expected from progress in EU integration, the Ministry of Finance said.

In the latest Standard & Poor's' report, GDP growth is expected to accelerate in 2024 to 2.9 percent (from 2 percent in 2023), driven by stronger personal consumption supported by real wage growth, ongoing infrastructure projects, including Corridors 8 and 10d, as well as export growth. According to the Agency, the growth opportunities in the country mitigate the adverse effects of events occurring among major trading partners, particularly Germany.

In the report, it is highlighted that the public debt is expected to remain at a moderate level and stabilize at around 53% of GDP during the period 2024-2027. The Agency assesses that measures have been implemented to appropriately manage interest payments, and these are lower compared to many other countries with a similar credit rating.

The agency highlights efforts towards fiscal consolidation. The approved budget for the year 2024 forecasts a budget deficit of 3.4 percent, indicating a reduction compared to the 4.6 percent of GDP deficit in 2023. The agency expects this trend of budget consolidation to continue, with the government's focus on economic growth and the implementation of infrastructure projects. According to Standard & Poor's' report,' strict adherence to the rules of the new Budget Law is crucial for fiscal consolidation.

EU membership is cited as a key factor for long-term structural and institutional development, fostering economic growth, and tackling challenges associated with migration. The successful implementation of structural reforms is crucial, while external influences, the electoral cycle, and conditions in financial markets are identified as risk factors. Concerning inflation, the report highlights a sudden slowdown in December 2023 and expects its stabilization, reads the press release.

According to the Ministry of Finance, Standard & Poor's underscores the significance of obtaining confirmation from the IMF for the initial review of the Precautionary and Liquidity Line (PLL), and the availability of funds from this program, along with other sources of financing.

In addition to the confirmed credit rating by this agency, the country's policies have received affirmation from the IMF and the World Bank through the recently signed Partnership Framework at the start of the year.

“The credit rating of a country reflects the level of investment risk associated with it and is one of the key indicators that potential investors consider when making their decisions,” the Ministry of Finance said in a press release.

Photo: Ministry of Finance