Saturday, 15 December 2018 | News today: 1

EC: Macedonian economy to rise 1.7 percent in 2017


The European Commission says in its latest Autumn Economic Forecast that Macedonia will end the year with a 1.7 percent growth.

“The economy contracted in the first half of the year, as political uncertainties lingered and investment declined sharply. With a new government in office since June, that seems committed to implementing fiscal and structural reforms and to providing support to domestic demand and employment, positive investor sentiment should return. Risks to fiscal sustainability may arise if the government increases corporate and wage subsidies as planned, without implementing durable consolidation measures”, reads the report.

The EC projects a GDP growth of 2.7 percent in 2018, followed by 3.2 percent in 2019. Employment is expected to rise, while unemployment is set to drop to 21.4 percent in 2018 and 21 percent in 2019.

“The economy is expected to recover over the forecast horizon, as investor sentiment is likely to improve with the breakthrough in the country’s political stalemate. GDP growth is projected to be driven increasingly by domestic demand. Household spending should benefit from further expected employment gains, bolstered by additional public funding for labour market measures. Disposable income is set to benefit from the rise in minimum wages, subsidised by the government, and by the increase in transfer payments, both effective since September 2017. Real net wages are expected to continue to increase at a slower pace, as consumer price inflation is picking up, driven by developments in core inflation”, reads the report.