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SKOPJE (Macedonia), July 28 (SeeNews) – The International Monetary Fund (IMF) said that Macedonia's economy is expected to expand by a real 3.4%, this year, while average annual inflation is seen at 1.0%.
In nominal terms, Macedonia’s gross domestic product (GDP) is expected to amount to 8.0 billion euro ($10.7 billion) in 2014 compared to 7.7 billion euro last year, the IMF said in a statement published on its website on Friday upon the conclusion of this year's Article IV consultation and third post-programme monitoring review.
In 2013, Macedonia's economy grew by a real 3.1% as average annual inflation stood at 2.8%.
The IMF projects that the country's current account deficit will expanding to 4.5% of GDP in 2014, from 1.8% of GDP a year earlier.
The fund's executive directors welcomed Macedonia’s economic recovery underway, the decline in unemployment, and the broadly favourable economic outlook, the statement added. However, securing a lasting expansion and durable reductions in unemployment requires continued efforts to preserve macroeconomic stability and promote a dynamic financial sector, as well as a more supportive business environment, it added.
The IMF expects that unemployment in Macedonia would stand at 29% in 2014, flat from last year and down from 31% in 2012.
Central government debt is seen at 36.3% of GDP at end-2014, up from 35.8% of GDP by December.
The IMF directors encouraged the Macedonian authorities to meet their 2014 deficit target for the central government, as a first step toward securing the consolidation needed to safeguard a sustainable trajectory for the public debt. “More broadly, they agreed that the overall policy framework would benefit from greater fiscal transparency and a well-articulated debt management strategy that takes into consideration both domestic and external sources of financing while maintaining macroeconomic stability and supporting growth,” the statement added.
In their monetary policy the authorities should continue to refrain from providing additional accommodation in the period ahead, barring an unforeseen deterioration of the macroeconomic environment, the statement added. The primary focus should instead shift to supporting the adequacy of international reserves and an exchange rate regime that has served the country well.