IMF calls on Macedonia to work on stronger fiscal consolidation

Source: Xinhua| 2017-11-23 00:48:51|Editor: yan
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SKOPJE, Nov. 22 (Xinhua) -- Considering the rapid rise in public debt and high gross financing needs, Macedonia needs stronger fiscal consolidation, according to an International Monetary Fund (IMF) report.

IMF published Wednesday on its website the concluding statement on Article IV consultation with Macedonia on the country's economic performance and policies.

In the statement, the IMF saw the formation of the new government here as a turning point for the Macedonian economy while it considered such development as an opportunity to rebuild policy space and revive reforms.

IMF noted that Macedonia should strengthen tax administration and increase property and energy taxation to boost revenues.

Further, IMF said that the country should work on improving spending efficiency through subsidy rationalization and better targeting of social spending, and ensuring pension sustainability.

The IMF also urged the Macedonian authorities to intensify the pace of structural reforms to increase employment and boost productivity.

"To preserve competitiveness and fiscal sustainability, the country should also keep wage growth in line with productivity developments," the IMF said in its concluding statement.

Meanwhile, IMF expects Macedonia's economic growth to slow down to 1.9 percent in 2017, from 2.4 percent in 2016.

"Economic activity has been supported by private consumption and exports, while negative effects from the prolonged political instability have restrained investment and slowed down corporate credit growth," it said.