IMF concludes first post-programme monitoring with Macedonia.

By bne IntelliNews June 27, 2013

The IMF said that its Executive Board has concluded the Article IV consultation and the first post-programme monitoring (PPM) with Macedonia, a release on the fund’s website informs. The main goal of PPM is closer monitoring of the policies of member countries that have substantial IMF debt outstanding after the expiration of their arrangements. The IMF said that baseline growth is expected to reach 2% this year, provided that public infrastructure works and foreign investment projects speed up as planned. The downside risks come from weak external environment and difficult liquidity conditions for the country’s private sector. Inflation is seen to decrease to 2.5% in 2013.

The IMF noted that the deficit in Q1 2013 was 2.4% of projected 2013 GDP or already two-thirds of the full-year target of 3.5% of GDP. Revenues were influenced by large VAT refunds, in line with the government’s commitment to clear arrears. The IMF assessed that “further expenditure compression will likely be needed to meet the deficit target.” As of the time of the mission visit, the authorities were not mulling a budget revision, claiming that the required adjustment could be accommodated within normal buffers, given current revenue trends.

The IMF’s Executive Board agreed that the near-term policy mix should remain supportive. However, the directors also assessed that a well-articulated and credible medium-term strategy should anchor fiscal policy. They also stressed that a larger focus on multi-annual budgeting will help in the assessment of fiscal space and avoiding payment arrears. The directors also recommended the implementation of measures for improving fiscal management, including public financial management.

Related Articles

Macedonia’s ex-PM Gruevski fears for his life, asks for additional bodyguards

Macedonian ex-prime minister and opposition leader Nikola Gruevski is seeking at least 20 more bodyguards from the state police, as he says he fears his life is threatened. Gruevski, leader of the ... more

Evolution Equity Partners closes $125mn cybersecurity-focused fund

Evolution Equity Partners announced on 17 July the final closing of a new fund with total capital commitments of $125mn to make investments in cybersecurity and next generation enterprise software ... more

Macedonia’s opposition VMRO-DPMNE tries to block parliament's work

Macedonia’s opposition VMRO-DPMNE party is trying to block the work of the parliament by forming 10 parliamentary groups instead of the single group that is normal for a political party.  ... more