IMF国际货币组织全球-Republic-of-North-Macedonia_2019-Article-IV-Consultation_75页_1mb

Summary of IMF Country Report No. 20/24: Republic of North Macedonia

Core Content

The IMF Country Report No. 20/24 provides a detailed assessment of the 2019 Article IV consultation with the Republic of North Macedonia. The report outlines economic developments, policy recommendations, and the outlook for the country's economy, emphasizing the need for continued reforms, fiscal consolidation, and improved institutional governance.

Main Economic Developments

• Growth: Real GDP growth reached 3.2% in 2019, supported by strong private consumption and a rebound in investment.
• Exports: Export growth remained high despite a slowdown in key trading partners.
• Imports: Increased due to strong domestic demand.
• Current Account: The current account deficit was modest, aided by remittances.
• Inflation: Remained low at 0.9% in 2019, driven mainly by euro area inflation and food/energy prices.
• Unemployment: The unemployment rate decreased to 16.8% in 2019, though it remains relatively high.

Key Policy Recommendations

Fiscal Policies

• Consolidation: A cumulative fiscal consolidation of 1.5% of GDP over 2020–2022 is needed to achieve a primary budget balance and increase fiscal space.
• Reforms: Full implementation of pension reform, including higher contribution rates and CPI-only indexation, and rationalization of agricultural subsidies.
• Revenue Base: Strengthen revenue administration and improve tax efficiency, particularly for VAT.
• Public Spending: Reorient public spending toward investment in physical and human capital.
• Budgetary Adjustments: The 2020 budget includes measures that will increase spending by 1.2% of GDP, such as public sector wage increases, VAT reimbursements, and social security subsidies.

Monetary and Financial Policies

• Monetary Policy: The NBRNM has maintained an accommodative stance, cutting the policy rate to 2.25% in 2019 and accumulating international reserves.
• Exchange Rate: The de facto exchange rate peg remains in place, with the NBRNM ready to tighten policy if needed.
• Financial Sector: The banking system is healthy, but further legal reforms, macroprudential measures, and capacity development are required to strengthen oversight.
• Credit Risk: Continued monitoring of household credit growth and corporate credit risk, including regulatory write-downs.

Structural Policies

• Institutional Reforms: Strengthening the rule of law, corruption control, and public administration is crucial for long-term growth.
• Informality: Reducing informality through improved revenue collection and anti-tax evasion measures is a priority.
• Minimum Wage: The minimum wage should be aligned with productivity to maintain competitiveness. It has increased rapidly, reaching 53% of the average wage in 2020, which may not effectively reduce poverty and could harm formal employment.
• Labor Market: Improving vocational education, active labor market policies, and skills training will help address labor market challenges.

Key Findings and Outlook

• Growth Outlook: Real GDP growth is expected to increase to 3.4% in 2020, and potential growth is projected to rise to 3.5% in the medium term due to reform dividends and continued FDI inflows.
• Current Account: The current account deficit is expected to widen to 1.9% of GDP by 2024, reflecting increased infrastructure-related imports and reduced private transfers.
• Fiscal Space: The current fiscal stance is too expansionary, and the deficit is projected to increase to 2.7% of GDP in the medium term under the baseline scenario.
• Debt Sustainability: Public debt is expected to reach 52% of GDP in the medium term, with gross financing needs peaking at 15% of GDP in 2021.
• Reform Momentum: The economy has entered a period of solid growth and stability following a protracted political crisis, but reforms must continue to sustain this momentum.

Risks and Challenges

• Downside Risks: Include global trade tensions, delayed EU accession negotiations, and uncertainty during the election period, which could delay investment and dampen export growth.
• Fiscal Risks: If the current path continues, capital spending will remain insufficient, limiting long-term growth potential.
• Fiscal Space: The fiscal deficit is expected to increase, reducing the ability to respond to future shocks.

Summary of the Staff Appraisal

• The IMF Executive Board endorsed the staff appraisal without a meeting.
• The economy has rebounded and is on a path of growth and stability.
• Reforms have strengthened public finances and policy credibility, but further progress is needed to address institutional and labor market weaknesses.
• Structural reforms are essential to boost growth, improve income convergence, and enhance competitiveness.
• Monetary policy remains appropriate, but buffers should be built to prepare for external shocks.
• The financial stability framework needs further strengthening, including a comprehensive bank resolution framework and improved systemic risk identification.

Conclusion

The IMF report underscores the importance of fiscal consolidation, structural reforms, and monetary stability in supporting long-term growth and fiscal sustainability in North Macedonia. Continued efforts to improve institutions, enhance tax compliance, and align wages with productivity are critical for the country's economic development and integration into the EU.