Skopje, 6 September 2021 (MIA) – Countries with higher vaccination rates have seen stronger economic rebound from the effects of the Covid-19 pandemic, IMF and World Bank representatives told Monday’s panel on “Macroeconomic policies and public finances in post-pandemic times” at the International Skopje Economic Finance Forum (SEEF), adding that more discerning and creative interventions in economy are needed. Alfred Kammer, Director at the European Department at the IMF, said target support should be maintained, but policies now need to focus on allowing workers to move from shrinking sectors to expanding sectors. “Vaccine policy is economic policy. In countries activity has rebounded more strongly where vaccine access was there and vaccination rates are higher. In Western Balkans on average vaccination rates are about 30 percent, half of what we see in the EU. This needs to be furthered in order to make the economy more resilient to the impact of the infection,” Kammer said. According to him, Western Balkan countries need to develop credible medium-term fiscal plans through increasing revenues by eliminating preferential tax treatments, improving tax administration and revenue collection, eliminating tax breaks which were given during the pandemic, increasing public investments and greener economy. “In general, we still need to continue with adaptation measures, because the pandemic is not over yet. Monetary policies are needed, central banks need to take into account current inflation rates. The credibility of central banks and monetary policies are important,” said Kammer. World Bank Regional Director for Western Balkans Linda Van Gelder said it’s become clear that we need to think about more discerning and creative interventions in the economy. “Covid has changed the structure of our economies, many jobs have disappeared and they’re not coming back, but new opportunities are also emerging such as e-commerce delivery or the movement in value chains. But without economic restructuring countries do run the risk of inflation and the potential appearance of zombie firms. And all of this suggests that now thinking about more targeted fiscal and monetary policies might be prudent, and not just providing counter cyclical support until the rebound take hold,”  Van Gelder said. In the Western Balkans, she added, the amount of Covid-related fiscal support was a bit lower than in the EU countries, except in Serbia where they actually came into the crisis at greater fiscal pace. According to her, more targeted and discerning interventions are needed to use limited fiscal reserves more effectively. “Accelerated structural institutional reforms are necessary and there is no other option. Finance ministers around the world are trying to find a way to increase growth without reducing fiscal space. Wherever there is room for accelerating structural and institutional reforms, now is the time to facilitate the transition to a greener and more digital economy,” said Van Gelder. North Macedonia’s Finance Minister Fatmir Besimi said in the country and globally, many unconventional measures were taken in response to the pandemic. “At the beginning it was difficult, but later there were funds available internationally. In the beginning the biggest challenge that came was a lot of uncertainties, the lockdown everywhere, but that stage was basically to save lives and to protect ourselves. The next step was to deal with the issues of how to keep the economy alive. Next measures were protecting jobs, then injecting cash to the business community, because we faced the issue in the supply chain and the value of demand,” Besimi said. According to him, this cost the country 11 percent of GDP in 2020 and 2021. “In each next step we were trying to have a more targeted approach, and also to add a development component, meaning not only help the loss-making companies but also motivate the good-performing companies creating jobs. The economy is recovering in Q2 of 2021 and this brings optimism, as all other indicators are showing,” said Besimi. He pointed out it has been decided not to stop with the support packages that should be more targeted and market-oriented, which is a long-term goal, and in terms of fiscal consolidation should be considered in the medium term. He added that more innovative financing instruments will be introduced including green bonds, development bonds, project bonds related to a specific project. They will be available to citizens who have savings, and not just to large investors. “Fiscal consolidation goes hand in hand with the growth of funding and the growth of an economy that is inclusive and sustainable. The concept is to have better management of public investment to better support the economy,” Besimi pointed out. Kosovo’s Finance Minister Hekuran Murati said it was a different story in Kosovo because three governments changed during the pandemic. “The fact that the pandemic lasted longer than initially planned certainly did take its toll in the economy. But it was not as bad as initially forecasted.  The initial forecasts were quite grim, but as we learned to live with the virus, we managed to cope with it. We needed help and we got help from the EU, the IMF, the World Bank, the ECB, and all other international partners, and it made the management of the crisis a lot smoother,” Murati said. The effect, he added, was not as bad as forecasted, with the figures showing a GDP contraction of 3.9 percent. “It looks like the economy is getting back on track, but it did leave some scars and consequences. A positive effect of the pandemic was that it forced businesses to be more creative, readapt, introduce delivery and online sales, and also our exports increased,” Murati pointed out. He stressed that the Kosovo government is trying to help overcome the effects of the Covid crisis with a campaign to formalize employment. Deputy Minister of Finance of Albania, Besart Kadia, said a specific situation in Albania was that there was an earthquake as well during the pandemic. “In 2020, we were expecting recession of 8 percent, and ended up with a 4 percent reduction. The measures taken have minimized the health risk due to vaccination, but in terms of other risks is what we cannot foresee. In 2021 it would not be a good idea to immediately withdraw all the government support for the economy even if things were looking good,” Kadia said. According to him, Albania is now focusing on e-services and start-ups and innovation technology, as well as keeping the youth at home. North Macedonia’s National Bank Governor Anita Angelovska – Bezhoska said since the beginning of the crisis a loose monetary policy has been maintained. “Economies are recovering. We forecast 5.4 growth, and according to new data it will be 5.2, which is very close to the Central Bank forecasts. However, there are still risks and policy support is still needed. Central banks should pay attention to two key parameters - the level of official reserves that we need to intervene if necessary and inflation, current inflation and inflation expectations,” said Angelovska – Bezhoska. Chairman of the Parliamentary Finances and Budget Committee, Timcho Mucunski, said the health system was not as prepared as the economy to deal with the effects of the Covid-19 pandemic. According to him, focus in the coming period should be on good governance and governing.