Macedonia not interested in IMF
Thursday, 14 May 2009
The one-week visit of the International Monetary Fund (IMF) Mission to Macedonia did not tackle the issue of concluding an arrangement, said Thursday Finance Minister Trajko Slaveski and new chief of IMF Mission to Macedonia, Wes McGrew.
"The Fund is open for assistance to Macedonia in a way and form of largest benefit for the country. It is up to the Government to decide", said McGrew.
Minister Slaveski agreed with the recommendations on caution when making economic projections, adding that the Government has different positions on certain issues than the IMF projections.
"The optimism that Macedonia will still register growth in 2009 is based on the latest information coming from the commodities' markets, where prices indices have increased by 20 percent compared to January, also followed by the oil and metallurgy product price surge", stated Slaveski.
According to Macedonian National Bank (NBRM) Governor Petar Gosev, their projection of -0.4 percent growth is based on economic analyses, whereas fresh projections would emerge only if parameters change in a few months. Foreign currency reserves amount to Euro 1,2 billion, remaining on the same level as a fortnight ago.
Asked about the Government's expectations of a 1 percent growth, McGrew said GDP projection is not an exact science, but in comparison to expectations of regional countries, this is an optimistic figure.
IMF projections on Macedonia's GDP growth in 2009 are -2 percent, given two weeks ago, prior to the Budget rebalance. However, taking into account the current information on export, industrial production, taxes, car imports etc, McGrew does not believe the projection should be altered.
"Government's economic policies for a stable domestic currency and the Denar-Euro tie functions well", said the IMF Mission chief, adding if foreign currency reserves significantly reduce, IMF is always an option.
The conclusions of the one-week regular visit of the IMF delegation on the performances of the Macedonian economy say it has sharply slowed down following the high growth in 2008, which is similar to regional and global developments.
"We expect gradual recovery in 2010, although it is difficult to predict how soon would global growth materialize", read the preliminary conclusions.
Pertaining to the Budget rebalance aimed at reducing expenditures as a result of reduced revenues, it is estimated this is a step in the right direction, but additional measures are recommended, in order to reach the 2.8 percent trade deficit if revenues drop under the projected level in the rebalance.
According to IMF, the main challenge for the country would be the payment balance, since shrinking export and private transfers significantly burden the current account deficit, accompanied by a slowdown in foreign direct investments and other capital revenues.
IMF says the zero percent inflation is welcome, along with the relatively healthy banking system, which balances are considered sufficiently strong to overcome the downward credit trend.
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