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SKOPJE (Macedonia), May 20 (SeeNews) – The International Monetary Fund (IMF) said that Macedonia's economy may expand by 3.5% in 2014, as investment in human and physical capital would be needed to unlock faster growth.
In 2013, Macedonia's economy grew by a real 3.1%, after contracting by 0.4% a year earlier, according to the country's statistics office.
Employment growth and increased public wages and pensions will support consumption, while investment will be bolstered by large public sector infrastructure projects, the IMF said in a statement on Monday, after an IMF team conducted post-programme monitoring of the Macedonian economy.
In the medium-term, the country's annual economic growth could reach 4.0% - supported by strengthening exports and some import substitution - suggesting a slow income convergence with the European Union countries, the IMF noted.
The IMF also said that in the short run, fiscal policy should be geared toward meeting the deficit target of 3.5% of the gross domestic product (GDP).
Last year Macedonia’s consolidated budget deficit widened by 8.0% to 19.2 billion denars ($427 million/312 million euro) and was equivalent to 3.9% of projected GDP, finance ministry data indicated.
“Over the medium term, the planned course for fiscal policy remains appropriate; laying out the measures underpinning the adjustment will reduce implementation risks,” the IMF said.
According to the IMF, the planned cut of the deficit to 2.6% of GDP in 2016 remains appropriate.
(1 euro= 61.5848 Macedonian denars)