Look for:

Our offer for

Research Detail

2023/06/01 / Erste Group Research

Ambitious investment plan supporting growth


Economic growth roughly halved in 2022, as negative spillovers from conflict in Ukraine weighed considerably on economy. High frequency indicators started to improve late in 1Q23, and together with ambitious investment plan should support growth over forecasted period. We have accordingly upgraded our expectations, now expecting average GDP growth of 2.4% y/y this year, before accelerating to 3% y/y in 2024.

Inflation peaked in October 2022 just shy of 20% y/y with food and energy prices accounting for more than 75% of total inflation on an annual level. Since then, inflation started to gradually decrease, coming down to 13% y/y in April 2023. Acknowledging the ongoing commodity price decline, the inflation rate is expected to average 9.1% y/y in 2023, before moderating to 3.5% y/y next year.

Monetary policy tightening started in April last year and continued throughout the year to keep inflation under control. The policy rate was increased by a total of 425bp since, standing at 5.5% in April 2023. Reserves recovered from earlier losses incurred at the start of the war in Ukraine.

The general government deficit reached 4.5% of GDP, down from 5.4% in 2021. This was below budget values, as the revenue side outperformed on inflation-driven VAT, while CAPEX once again fell short of the target. The targeted gap this year is 4.8% of GDP, reflecting spending needs related to the energy crisis and new highway construction.

North Macedonia is still in the process of important constitutional changes to include Bulgarians in the preamble as constitutive people and thus avoid repeated Bulgarian EU blockades.

PDF Download Download PDF (294kB)

General information

AuthorErste Group Research
Date2023/06/01
Languageen
Product nameCEE Country Macro Outlook
Topic in focusFX, Macro/ Fixed income
Economy in focus-
Currency in focus-
Sector in focus-
Download



Decline
Accept

We use cookies and web analysis software to give you the best possible experience on our website. If you consent, these tools will be used. Please read more information here

INFORMATION FOR PRIVATE CLIENTS / CONSUMERS

Any information, material and services regarding financial instruments and securities provided by Česká spořitelna/Erste Group/ or any of its affiliates (collectively “Erste Group“) on this and any linked website hereafter (jointly the “Websites“) shall be exclusively to investors who are not subject to any legal sale or purchase restrictions.

By agreeing to this hereto, the visitor entering this Websites confirms that has read, understood and accepted this Information and the Disclaimer