Skopje, 14 November 2023 (MIA) – Representatives of the International Monetary Fund (IMD) and the authorities in North Macedonia reached an agreement that would make EUR 200 million from the IMF’s Precautionary and Liquidity Line available to the country. At a press conference Tuesday, Finance Minister Fatmir Besimi and the head of the IMF Mission to Skopje, Jacques Miniane, said the funds are subject to approval by IMF’s executive board at a meeting planned for December 21.

“However, the IMF staff will recommend to the board that they approve the review, and if they approve [it], that will make approximately EUR 200 million available to the authorities of North Macedonia,” said Miniane.

According to Miniane, the authorities in the country plan to draw approximately EUR 150 million, and treat the rest as precautionary.

“The fact we reached agreement is very positive news. The second message that I wanted to pass on is that we expect economic activity to accelerate as we enter 2024. We project construction of the Corridor VIII/X-d project to accelerate, right now they are doing a lot of geotechnical studies, but as construction picks up, this is going to stimulate economic activity,” said Miniane.

According to the IMF representative, the IMF projects growth of approximately 2.3 percent for 2023, and 3 percent for 2024.

Miniane said fiscal policy, budget policy and budget numbers are moving in the right direction. He said the IMF Mission is confident that the authorities will meet the budget deficit target of approximately Mden 42.8 billion, and that there is a possibility that they may do better. He noted that they fully support the Government’s intention to approve a 2024 budget consistent with the deficit target of approximately Mden 33-34 billion.

Regarding inflation, Miniane, said the rate of inflation is dropping because of global factors, since global energy and food prices are coming down. He stressed that the framework of the National Bank of North Macedonia is robust, and the central bank has the instruments to deliver results, however, he said, “we should not be complacent”.

Additionally, the IMF representative highlighted that the banks in North Macedonia are healthy and there are no major stability concerns. He said the IMF Mission fully agrees with the National Bank that now, when the banks are profitable, is the right time to continue tightening capital requirement and building buffers in the banks.

At the press conference, Minister Besimi said an agreement has been reached over the second tranche with the IMF.

“We have reached an agreement over the second tranche as well. Of course, procedures are set to follow until the end of the year in the management of the IMF. But, this was the first precondition for us to adopt a budget with a deficit of 3.4 percent, which is a significant reduction of the deficit compared to the current year. If we compare from the COVID-19 pandemic onwards, when the deficit was 8 percent of GDP, we had a recession of 4.7 percent, while today, we are talking about a trend of increasing and accelerating growth which is projected to be higher next year since we’ve already reduced inflation to a single-digit figure,” said the Finance Minister.

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