North Macedonia’s central bank maintains 2021 GDP projection, ups inflation forecast

North Macedonia’s central bank maintains 2021 GDP projection, ups inflation forecast

Annual inflation is expected to remain moderate in the medium term

By bne IntelliNews May 11, 2021

The National Bank of North Macedonia has kept its projection for the GDP growth in 2021 at 3.9%, following a 4.5% contraction in 2020, it said on May 11.

The growth is expected to be driven by domestic consumption while a negative contribution is expected from net exports.

In the medium term, the central bank expects a further recovery of North Macedonia's economy, with growth rates of 3.9% and 4% in 2022 and 2023, respectively, it said in a statement.

Such a growth dynamic means that the country’s economy would return to the pre-crisis level during 2022, just like in the central bank's October projections.

Annual inflation is seen staying moderate in the medium term

“For 2021 we are making a moderate upward revision from 1.5% to 2.2%, taking into account the more pronounced upward corrections in the prices of primary products on world stock exchanges, primarily oil and food prices,” the central bank said.

For 2022 and 2023, the central bank kept the inflation projection at an annual 2%.

After the country's current account deficit widened last year to 3.5% of GDP, due to the more pronounced decline in private transfers, the current account gap is expected to narrow in medium term to an average of 2.1% of GDP, which is close to the pre-crisis level, according to the central bank.

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