The Macedonian economy is facing with a recession and a projected negative growth of the GDP in 2020 of 0.4% if the coronavirus crisis end by the end of June and then the economy will start returning to normal, states the latest report issued by the World Bank titled as “The Fight against Covid-19”.
“Personal consumption is expected to slow down significantly compared to 2019, while exports and investments will decline. On the other hand government consumption would ramp-up in an attempt to boost the economy and to counter the adverse crisis impact. Increased government spending will result in higher deficit and debt levels at a time when financing conditions (both domestic and external) may tighten” informs the report.
The report recommends a budget revision and to reprioritize spending. The World Bank expects that once the immediate crises is over, the NATO accession and the launch of the accession negotiations with the EU should help accelerate recovery in 2021.
“Under this scenario, growth is expected to recover in 2021 to 3.7 percent, as consumer and investor confidence is restored resulting in rising personal consumption and recovering of private investments.” the report states.
The World Bank stresses if the crisis gets prolonged beyond mid-2020, the economy might end up in a deeper recession (of above -2 percent) accompanied by faster rise in unemployment and poverty.
“This will require mobilizing stronger fiscal and monetary response beyond 2020” states the report.