Skopje, 15 April 2023 (MIA) — Fitch Ratings has revised North Macedonia's BB+ outlook from negative to stable, which confirms that the government's policies were effective, according to the Ministry of Finance in a press release.

Fitch revised the country's outlook to stable due to North Macedonia's economy having demonstrated resilience to the global pandemic and the spillovers from the war in Ukraine and maintaining macroeconomic stability through adherence to a credible and consistent policy mix underpinned by the longstanding exchange rate peg to the euro, the release says.

"For North Macedonia, the credit rating's revised outlook from negative to stable is particularly significant because it confirms the good policies implemented in conditions of a global price and energy crisis," the release adds.

In the report, Fitch highlights that the general deficit narrowed to 4.5% of GDP in 2022 from 5.4% in 2021 and it expects the deficit to narrow to 3.9% in 2023 and 3.2% in 2024 owing to reduced energy-support spending, tax adjustment measures and a reviving economy.

According to the agency, disbursements under the recently agreed IMF precautionary and liquidity line will contribute to the strengthening of fiscal consolidation. 

In addition, the agency expects that easing food and energy prices are set to pull down inflation to an average of 4.1% in 2024.

Progress towards EU accession and reduction in political and political risk could be a factor leading to the country's rating being upgraded.

Fitch Ratings publishes credit ratings that are forward-looking opinions on the relative ability of an entity or obligation to meet financial commitments.

"Credit rating has a positive impact on decisions to invest in a country, which in turn increases economic growth, exports, employment opportunities and wages," the Ministry of Finance says. mr/