Growth is expected to speed up primarily due to stronger domestic demand, especially from a substantial rise in public investment, the Commission said in its Spring 2024 Economic Forecast report.
North Macedonia's economy is estimated to have grown by 1% in 2023.
"The growth outlook could be challenged if the major public investment project, Road Corridor 8 and 10d, continues to face significant implementation delays," the EC added.
The Commission projects North Macedonia's economy to expand by 3% in 2025.
The fiscal deficit widened in 2023 but is projected to gradually decline due to recently adopted tax base broadening measures and cuts in energy subsidies, despite new spending commitments for public sector wages, the EC said.
Inflation is seen slowing down to 3% in 2024 from 9.4% last year.