Skopje, 1 November 2022 (MIA) – Inflation is expected to calm down, says International Monetary Fund (IMF) mission head Bergljot Barkbu and adds that the pressure of global food and energy prices is reducing, with further decrease expected. Barkbu told TV24 the inflation is still high and monetary policy will probably require further tightening. “The inflation rise is a global phenomenon, it reflects the high energy prices and some long-term logistical disruptions resulting from the pandemic. This is especially present in countries such as North Macedonia, since food and energy assume a large portion of the consumer basket and that is why the inflation is so high. Regarding the crisis management policies, I would say you should focus on two areas: one is to be responsible in public spending, increase of salaries, pensions and the minimum wage; secondly, we have seen that the National Bank has already began to tighten the monetary policy,” says Barkbu. The inflation is expected to drop as of next year and reduced to about two percent in the mid-term. Barkbu says that in a situation of big global risks, it is helpful that North Macedonia has concluded a Precautionary Liquidity Line (PLL) arrangement with the IMF, which ensures good protection. On the banking system, she says it is holding up well, including a low rate of non-functional loans, whereas banks have the required buffers to cope with the effect of the shocks. IMF expects the country’s GDP growth to remain solid and amount to 2.9 percent in 2023, followed by a gradual mid-term increase.