North Macedonia Fiscal Balance (% of GDP)

Fiscal Balance in North Macedonia

Economic conditions likely remained muted in Q1, after annual GDP growth slowed to a two-year low of 0.6% in Q4. Data for Q1 paints a mixed picture. On the one hand, sky-high inflation and tighter financing conditions should have hurt domestic demand. On the other hand, production data shows a broad-based improvement: Industrial output rebounded year on year in February and grew further in March, while retail sales posted a strong increase in Q1. Moreover, the merchandise trade deficit shrunk notably on an annual basis in March on rising exports and falling imports. In other news, on 14 April, Fitch Ratings revised North Macedonia’s ‘BB+’ outlook to stable from negative, citing the economy’s resilience to external shocks and sound macroeconomic policies.