SKOPJE (North Macedonia), November 7 (SeeNews) – The European Commission (EC) said on Thursday it has increased its projection for North Macedonia's economic growth in 2019 to 3.2% from 3.0% forecast in May.
"Economic growth is set to gain speed, supported by solid household spending and the ongoing recovery of investment," the Commission said in its Autumn 2019 Economic Forecast report.
Domestic demand is projected to be the sole growth driver, underpinned by robust private consumption and a continued recovery in investment following a protracted period of weakness, the Commission noted.
Fiscal consolidation measures are having a beneficial impact on the primary balance, but are not sufficient to stabilise debt levels, the Commission estimated.
North Macedonia's economy is expected to grow by 3.2% in 2020 and by 3.3% in 2021, from 2.7% estimated in 2018.
“Downside risks to the growth outlook come mainly from a stronger than expected deterioration of the external environment, exacerbating the drag on growth from net exports,” the report reads.
According to the EC, risks on the domestic side stem from further delays in key public infrastructure works; from potential for renewed political instability; and from rising divergence between labour productivity and wage dynamics undermining external competitiveness.
Projections for North Macedonia's main economic indicators from the Autumn 2019 Economic Forecast follow (pct change unless stated otherwise):
|
2019 |
2020 |
2021 |
GDP growth |
3.2 |
3.2 |
3.3 |
Private consumption |
3.1 |
2.9 |
2.9 |
Public consumption |
3.1 |
2.8 |
2.2 |
Gross fixed capital formation |
8.6 |
9.3 |
8.7 |
Exports |
9.9 |
9.7 |
9.2 |
Imports |
10.2 |
10.1 |
9.3 |
Unemployment rate (% of total labour force) |
17.5 |
16.5 |
15.5 |
Harmonized consumer price inflation |
1.4 |
1.9 |
2.0 |
General govt gross debt (% of GDP) |
41.9 |
42.5 |
42.7 |