EBRD reduces Macedonia's GDP growth forecasts for 2011, 2012.

By bne IntelliNews October 18, 2011
In its latest Regional Economic Prospects report, the EBRD forecasts that Macedonia's GDP will grow by real 3% in 2011 and 2.4% in 2012. In July, the EBRD had predicted real GDP growth rates of 3.1% this year and 3% next year. In the latest report, the EBRD also forecasts annual GDP growth in the last quarters of 2011 and 2012 at negative 0.9% and positive 6.3%, respectively. The EBRD comments that Macedonia's economic growth has been surprisingly strong in H1 2011, driven by high exports and FDI. However, the institution notes that growth is likely to decelerate in the remainder of 2011. The EBRD expects that growth will continue in 2012, provided there is strong demand for Macedonia's metal exports. The institution comments that the precautionary credit line received from the IMF early this year will also help maintain macroeconomic stability. On the other hand, the EBRD said that Macedonia is highly vulnerable to a Eurozone recession and turbulence in Greece. In its latest report, the EBRD projects average inflation of 4% in 2011. The institution forecasts that the budget deficit will be 2.5% of GDP this year. The CA deficit is projected at 5.5% of GDP in 2011, while net FDI is forecast to amount to 4.9% of GDP this year.

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