May 4 (SeeNews) - The World Bank said on Wednesday it expects North Macedonia's economic growth to decelerate to 2.7% in 2022, after increasing by an estimated 4% last year.
North Macedonia's economy returned to growth, driven by a strong rebound in consumption, but the post-pandemic recovery was cut short as a result of the war in Ukraine, the World Bank said in a statement after releasing its latest Western Balkans Regular Economic Report.
"The Western Balkan economies, including North Macedonia, saw a solid growth recovery in 2021, but now they face new challenges due to the war in Ukraine, with surging commodity prices, disruptions in trade and investment flows, and rising financing costs," Massimiliano Paolucci, World Bank Country Manager for North Macedonia and Kosovo, said.
North Macedonia will need to reprioritise spending and strengthen tax collection in order to reduce debt sustainability concerns, Paolucci added.
In its Global Economic Prospects report published in January, the World Bank projected 3.7% economic growth for North Macedonia in 2022.
Economic growth for the Western Balkans region is now forecast at 3.1% in 2022, down from the 4.1% estimate in January. The region's GDP growth reached 7.4% in 2021, after a contraction of 3.2% in 2020.