Skopje, 15 May 2014




Today, the National Bank of the Republic of Macedonia Council held its fifth session, at which the latest Quarterly Report was discussed and the latest macroeconomic projections were presented.

During the first quarter of 2014, the interest rate on CB bills remained at the level of 3.25%. Most of the macroeconomic indicators were moving in line with the previous projections of the National Bank. Some deviations in individual segments were registered, but they do not substantially affect the way things look like from a macroeconomic point of view.

Inflation continued to slow down in the first quarter of the year, showing price pressures lower than anticipated. The slowdown was a result of factors on the supply side, i.e. of deviations in the dynamics of world prices and their second-round effects on the domestic prices. It is expected that the growth of domestic prices in 2014 will decelerate considerably, where the average inflation will be around 1%, with mostly downward risks.

In 2013, the growth in the domestic economic activity was consistent with the previous projection and equaled 3.1%. The latest indicators for the first quarter of 2014, and the assessments for the future path of the key external and internal factors point to a dynamics of economic growth that does not deviate from the previous expectations. Forecasts for the economic growth in the next two-year period have not changed, which implies its acceleration and reaching up to 3.7% in 2014 and 4.4% in 2015. Growth is still expected to come from the export and investment demand, which corresponds with the assessments for improving external economic environment, entry of new and increased utilization of the existing export oriented capacities, and positive impetus from public investments. Also, household consumption is expected to give a substantial positive contribution to growth, especially in 2015, against the background of continuous improvement of the conditions on the labor market, credit support and more stable expectations.

In 2013, given the better than expected trade balance of services and higher than expected current transfers, the current account deficit was lower than the estimates and equaled 1.9%. Despite the improved export, it is expected that the growing import demand and declining share of private transfers in GDP would widen the current account deficit, whereby it will equal 4.0% in 2014 and 5.8% in 2015. In the capital and financial account, debt-creating and non-debt creating flows are further expected, which will be sufficient to increase the foreign reserves by the end of 2015 and to further maintain them at an adequate level. 

 Governor's Office