April 6 (SeeNews) - The World Bank on Thursday forecast Macedonia's economy will grow by a real 2.8% in 2017, lowering its projection from 3.3% expansion predicted in November 2016.
The new forecast is conditioned by the resolving of the current political crisis, the bank said in its Spring 2017 Western Balkans Regular Economic Report published on its website.
"Growth projections assume that political uncertainties are resolved in early 2017, which would improve the confidence of both consumers and private investors," the World Bank said, noting that failure to resolve the crisis in a timely manner will further dent investor confidence and delay much needed structural reforms.
The Spring 2017 report envisages growth of 3.3% and 3.8% in 2018 and 2019, respectively.
According to the World Bank, the political crisis in the country slowed down economic growth to 2.4% from 3.8% in 2015, negatively affecting investment. In 2016, growth was driven mainly by construction, while manufacturing production dropped.
Youth unemployment in Macedonia remained high last year, increasing to 48.3% from 47.5% in 2015, despite the government's efforts to stimulate this age group by excluding it from making social contributions.
"Although credit continued to expand in 2016, it masked a significant slowdown in corporate lending because of the uncertain political climate," the World Bank said.
The World Bank's Spring 2017 forecasts and estimates for 2016 for the main economic indicators in Macedonia follow:
Macedonia |
2016 |
2017 |
2018 |
2019 |
Real GDP growth (percent) |
2.4 |
2.8 |
3.3 |
3.8 |
Consumer price inflation (percent) |
-0.2 |
0.6 |
1.4 |
1.8 |
Public debt (percent of GDP) |
39.0 |
41.0 |
42.1 |
44.0 |
Trade balance (percent of GDP) |
-14.7 |
-13.6 |
-12.2 |
-11.5 |
Remittances inflows (percent of GDP) |
2.1 |
2.0 |
2.0 |
1.9 |
Current account balance (percent of GDP) |
-3.1 |
3.0 |
-2.7 |
-2.1 |
Foreign direct investment inflows (percent of GDP) |
3.6 |
2.5 |
2.7 |
2.9 |
source: World Bank