EC Cuts Macedonia 2017 GDP Growth Forecast Over Political Uncertainty

The European Commision said on Thursday it has lowered its projection for Macedonia’s economic growth in 2017 to 2.9% from 3.2% previously, citing the prolonged political crisis in the country as the main reason for its decision.
The forecast for Macedonia’s economic growth in 2018 has also have been lowered, to 3.2% in the Spring 2017 Economic Forecast, from 3.6% growth in the winter edition of the forecast.
“The economic fundamentals for strengthening domestic demand and exports remain sound,” the Commission said. “However, downside risks to the positive outlook stem from the enduring political crisis as institutional capacities for implementing structural reforms are impeded, and debt stabilisation remains elusive in the face of sustained fiscal deficits and borrowing needs of public enterprises.”
Macedonia’s 2016 gross domestic product (GDP) growth was hit by a deteriorating investment climate. The country’s economy expanded by just 2.4% last year following a much stronger growth of 3.8% in 2015.
The Commission expects consumer prices in Macedonia to rise slightly in 2017, by 0.8%, and to increase by 2.3% next year, following deflation of 0.2% in 2016.
“With firming prices for imported energy and raw materials feeding into food and household costs, consumer prices are expected to rise, albeit moderately,” the European Commission said.
Details on Macedonia from the Spring 2017 Economic Forecast follow (pct)