Skopje, 1 April 2026 (MIA) — The International Monetary Fund has welcomed the government's efforts to reduce the fiscal deficit to 3.5% of GDP in 2026, the Ministry of Finance said Wednesday in a press release.

After its annual two-week visit to look at the country’s finances, the IMF released a report urging the government to continue cutting spending to reach a 2% deficit by 2030. To boost revenue, the fund has suggested ending VAT reductions, fighting the grey economy and making tax collection more efficient, the finance ministry said quoting the IMF report.

Reviewing the country's growth and inflation, the IMF report said the economy grew by 3.5% in 2025, thanks to new construction projects and consumers spending more. Inflation dropped from 4.8% last July to 2.9% in February.

The IMF report also said growth will likely slow to 3.1% this year because the conflict in the Middle East is making energy more expensive. It also said the country needs structural reforms, which "can lift productivity, strengthen competitiveness, and support faster income convergence with the European Union."

"Energy sector reforms are critical to ensure energy security and affordability," the report said, adding: "To strengthen energy security and support the green transition, the sector needs deeper integration with the European energy networks, and investment in energy infrastructure and renewables."

The IMF team visited from March 18 to 31 for its yearly Article IV consultation, which is a routine review of how member countries are managing their finances. mr/