The International Monetary Fund (IMF) has completed its Article IV consultation for North Macedonia, projecting GDP growth of 3.3% in 2025, it said on May 6. This growth is expected to be driven by stronger domestic demand, public investment—including the Corridor 8/10d road project—and increased consumption, supported by government transfers and rising real wages.

This follows the IMF's previous April projection of 3.2% growth for 2025. However, the IMF also warned that weak external demand, particularly due to structural shifts in Europe’s automotive sector and global uncertainties, may hinder economic progress.

Inflation in North Macedonia has been volatile, peaking towards the end of 2024 but recently easing in line with energy and food price adjustments.

Despite this, core inflation remains persistent, largely due to strong wage growth. The National Bank of the Republic of North Macedonia (NBRNM) has started cautiously easing monetary policy, following the European Central Bank’s approach.

In 2024, fiscal consolidation progressed slower than anticipated, with a budget deficit of 4.4% of GDP. Public debt reached 63% of GDP by the end of the year, exceeding fiscal limits.

The IMF highlights several risks, including weak public investment, stalled productivity reforms, emigration, and a more uncertain external environment. Despite a positive growth outlook, the IMF stresses that downside risks to the economy remain significant.