Skopje, 7 October 2023 (MIA) - In its latest report, Fitch Ratings has affirmed North Macedonia at 'BB+' with a stable outlook. The rating comes as a result of implementing properly designed, credible and consistent macroeconomic and financial policies that underpin the longstanding fixed exchange rate, the Ministry of Finance said in a press release.

The result is particularly significant, adds the press release, given the global environment and unfavorable factors, such as the technical recession in Germany and the war in Ukraine.

"Fitch expects a decrease in the budget deficit to 4.5% of GDP in 2023, which will further decrease in 2024 and will be at a level of 3.4% of GDP," the Ministry of Finance says. 

According to Fitch, the strengthening of fiscal consolidation comes as a result of the continuous progress of the Government in the management of public finances and the introduction of fiscal rules and the Fiscal Council, in accordance with the new Budget Law.

Inflation has returned to single digits, and Fitch assumes that headline inflation will return to low single digits over 2024 as a result of the food price freeze and tighter monetary policy.

Fitch notes that real wage growth has returned to positive territory and higher pensions boost consumption, which will positively impact economic growth. Private consumption and investment will continue to drive growth over the forecast period, with the latter driven by the scaling up of work on Corridor 8/10d and private investment in the energy sector. 

Credit rating has a positive impact on a country's investment decisions, which in turn has an impact on increasing economic growth, exports, employment and wages, reads the press release.

Photo: MIA archive