The International Monetary Fund has issued a report highlighting the detrimental effects of escalating energy costs, originating from the Middle East conflict, on North Macedonia’s economic outlook. The situation is projected to dampen growth and exacerbate inflationary pressures within the country. Specifically, forecasts predict a slowdown in real GDP growth to 3.1 percent for 2026.
This rate is expected to gradually stabilize around a consistent 3 percent in the medium term. These projections underscore the significant challenges facing the North Macedonian economy. Crucially, rising global oil prices are anticipated to contribute to inflation, with estimates suggesting an increase of approximately 4.5 percent in 2026.
This raises serious concerns regarding the affordability of energy for citizens and businesses. The IMF acknowledges the steps taken by the government in Skopje to lessen the impact. These measures include a reduction in Value Added Tax (VAT) on fuel, decreasing it from 18 percent to 10 percent, and the release of coal reserves.
These actions represent an attempt to address the immediate economic pressures.
Topics: #growth #economic #north
North Macedonia’s economic expansion is anticipated to decelerate, alongside an increase in inflation, stemming from the ongoing crisis in the Middle East.
North Macedonia’s economic expansion is expected to decelerate, alongside a surge in inflation, stemming from the ongoing Middle East crisis.