SKOPJE (Macedonia), May 21 (SeeNews) – Macedonia’s economic growth is expected to accelerate towards 3% year-on-year in 2018 driven by a rebound of investments and stable consumption profile, after it stagnated last year, Austria's Erste Group said.
“The current account is expected to remain at acceptable levels, as the potential deterioration of the trade balance should be covered by stronger performance of remittances and services,” Erste said in a research paper on Macedonia’s macro-economic outlook published last week.
Macedonia's central bank is expected to maintain its accommodative stance, while fiscal metrics will be strongly determined by economic performance, according to the research paper.
“Inflation moved back to the positive region in 2017 and we expect gradual acceleration in 2018, with the low base effect, fuel excise hike and stronger domestic demand playing key roles,” the banking group noted.
As for Macedonia's monetary policy, Erste noted that in March the country's central bank has continued its easing cycle by cutting the bill interest rate from 3.25% to 3.0% and reducing deposit facility rates. The lending activity started to accelerate due to monetary easing, government subsidies and stronger demand, Erste added.
With regard to politics, the European Commission recommendation to the Council to open accession negotiations with Macedonia serves as an important policy credibility anchor and provides support for the government to continue with economic and institutional reforms, Erste said.