4/28/2022
Even the IMF forecasts lower growth, GDP to increase 3.2% this year and 2.7% the following

In their latest Global Economic Prospects issue, the International Monetary Fund forecasted 3.2% growth of the Macedonian economy this year, down from the January 4% forecast (0.8 p.p. drop). Next year, IMF forecasts even lower growth of the Macedonian GDP – only 2.7%, against the 3.8% growth that was projected in the February report of the IMF Mission to Macedonia.

Inflation was also subject to corrections and therefore, data revealed in the Global Economic Prospects ahead of the Spring Meetings of the IMF and the World Bank shows that consumer prices by the end of the year will surge 5.2%, and inflation in 2023 will amount to 3.3%. This year, current account deficit will reach 5.8%, reducing to 3.6% the year after.

A week ago, the World Bank published its spring forecasts as well, according to which the Macedonian economy is expected to slow down this year, recording 2.7% growth, largely due to the Russo-Ukrainian conflict and the sanctions imposed against Russia.

Forecasts indicate that inflationary pressures, especially food and energy prices, will increase the cost of living, chiefly afflicting the vulnerable populations.

Incidentally, the IMF report expects slowdown of the overall growth in 143 countries, which create 86% of the global GDP.

While presenting the latest April report on the Global Economic Prospects, IMF Chief Economist, Pierre-Olivier Gourinchas, said that the main reason for revising growth projections downward is the Russian invasion of Ukraine.

In his opinion, the war in Ukraine further deteriorated the problems in the global supply chains, which were disrupted since the outbreak of the coronavirus pandemic, contributing to a global surge of commodity prices, particularly food and energy prices, causing a strong inflationary leap.

IMF estimates that global growth will decelerate to roughly 3.3% in the medium term, down from the average 4.1% between 2004 and 2013, in comparison with the 6.1% growth last year.