Remittances sent from abroad to North Macedonia, which were significantly affected during the COVID-19 pandemic, have been growing at high rates of 30% to 40% recently, culminating in a historic milestone of €2.4bn in 2022, central bank governor Anita Angelovska-Bezoska said on May 23.

According to the governor, this positive trend is expected to continue in the medium term.

However, the growth rates are projected to moderate, with an anticipated annual increase of 3% to 4%.

Moreover, the expectation of reduced pressures on energy prices is likely to have a positive impact on the trade deficit. As a result, the current account deficit is projected to narrow by 2.4 percentage points (pp) on an annual basis in 2023, reaching 3.6% of GDP, Angelovska-Bezoska said.

This trend is expected in the medium term as well, in conditions of further gradual stabilisation of the prices of primary products and further recovery of foreign export demand.

The financial net inflows in the period 2023-2025 would fully finance the current account gap and would contribute to the further growth of the FX reserves, which will remain at the appropriate level for the entire period.

Foreign direct investment (FDI) reached 5.7% of GDP in 2022, one of the highest rates ever. The expectations for the next period are that they will continue to grow and would average 3.7% of GDP in the medium term.

According to the International Monetary Fund, North Macedonia’s current account gap of the country is forecast at 4.6% of GDP in 2023 and 3.7% in 2024, following a gap of 6% of GDP in 2022.