Skopje, 26 February 2025 (MIA) – Growth is gaining momentum in 2025, driven by stronger domestic demand as public investment projects intensify and consumption is supported by government transfers and real wage growth, according to the preliminary findings in the International Monetary Fund (IMF) Staff Concluding Statement of the 2025 Article IV Mission, the Ministry of Finance said in a press release.   

The IMF, adds the press release, notes the government's objectives of reducing the deficit, boosting productivity, raising living standards, and reducing informality.

According to the IMF, growth is expected at 3.3 percent in 2025, with the impact of weak external demand seen in 2024 expected to persist. In the long term, high emigration could have an impact on growth. Therefore, the IMF believes structural reforms are key to boost productivity and offset costs of emigration, with a view to improving the business environment, strengthening the labor market, increasing public infrastructure investment, strengthening the rule of law and anti-corruption efforts, as well as enhancing governance.

"The IMF notes the government's goal of reducing the budget deficit, stating that it is crucial to achieve the expected increase in revenues by reducing the shadow economy and increasing tax compliance. In addition, the IMF welcomes the Public Revenue Office’s efforts to modernize tax collection and reduce informality. It points out that a credible fiscal strategy is needed that will ensure compliance with fiscal rules on the level of the budget deficit and public debt, which is key for preserving credibility to maintain access to international capital markets, creating space for investment, and strengthening resilience against future shocks. According to the IMF, the focus should be on controlling current spending by returning to a rule-based pension system indexing only to inflation, as well as limiting public wage growth to inflation in the near term," reads the press release.  

The IMF mission notes that structural fiscal reforms are needed to strengthen fiscal governance and improve spending efficiency, adding that some progress is underway. The IMF staff also notes that key ongoing measures include implementing the Public Investment Management decree and manual, adopting the PPP law, and conducting spending reviews to optimize budget allocation.

The IMF mission took place during February 13-25, and a report will be prepared based on the preliminary findings. Missions are undertaken as part of regular, usually annual, consultations under Article IV. 

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