Macedonia’s c-bank slashes GDP growth outlook on weak global metal markets, domestic uncertainties

By bne IntelliNews November 13, 2015

Macedonia's central bank cut on November 12 its economic growth outlook, citing "worsened external environment, especially more unfavourable for the metal export sector and higher uncertainty in the domestic economy."

The bank projects GDP growth of 3.2% in 2015 and 3.5% in 2016, down from 4.1% and 4.5%, respectively, anticipated in April, before the deepening of the political crisis in the country. Growth is set to strengthen to 4% in 2017. The economy is expected to be driven mainly by exports and investments, with an additional contribution by private consumption, in the next two years.

Earlier this month, the European Commission (EC) reduced its forecasts of Macedonia’s GDP growth to 3.2% from 3.8% for 2015 and 3.5% from 3.9% for 2016, while the European Bank for Reconstruction and Development (EBRD) kept its 2015 growth projection at 3.5%, but lowered the 2016 forecast to 3.5% from 3.7% expected in May.

Macedonia's central bank revised down by 0.5pp its inflation projections for both 2015 and 2016, to 0% and 1.5%, respectively.

It forecast a deceleration of deposit growth to about 4% in 2015, to pick up to 6.8% and 9.1% in the following two years. Credit growth is estimated at 7.7% this year and is projected to stay in the range of 7%-8% in the next two years.

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