SKOPJE (Macedonia), November 5 (SeeNews) – Macedonia's central bank said it has lowered its forecast for the country's GDP growth in 2018 to 2.3%, from previously predicted 3.2%, mostly due to lower investments.
The correction reflects the weaker performance in the first half of 2018 when the economy expanded by 1.6% year-on-year versus the forecast
growth of 3.3%, the central bank said in its Revision of the Macroeconomic Projections report 2018-2020 released on Friday.
“The assumption on investment rebound remains a major source of risk for the forecast,” the central bank noted.
The central bank also said it expects Macedonia's economy to gradually recover after the stagnation in 2017, adding that economic growth is expected to accelerate to 3.5% in 2019, 3.8% in 2020 and 4% in 2021.
“Analyzing the growth structure, domestic demand is expected to be the major growth driver, except for 2018 when net exports have the dominant role,” the forecast reads. “On average for 2018-2020, export demand remains the key growth factor due to the activity of foreign export facilities, investments of new companies and the further growth of foreign effective demand.”
The central bank bank also lowered its forecast for the average annual consumer price inflation to 1.6% in 2018, from 2.0% projected in April. “The current inflation dynamics is slightly below expectations due to food prices.”
Inflation of around 2% is expected in 2019-2021, amid small positive output gap and moderate rise in import prices, the central bank said.