Macedonia Bank Says Economy is Holding Up

Macedonia’s economy faces a prolonged period of danger from the crisis affecting the eurozone but macroeconomic stability and the stability of the currency, the Denar, are not shaken, the Central Bank says.In its latest overview, the bank says that while there is no “great pressure on the national currency” risks to the economy from the European crisis remain serious.

“Despite a stable ambient for monetary policy, the risks linked to uncertainty over the debt crisis in the eurozone, and the effects on the global and local economy, are still present,” the bank said.“The effects are additionally highlighted by ongoing speculation about possible scenarios regarding Greece and the eurozone,” the bank added, referring to reports that the eurozone might fall apart, or at least that Greece might have to exit the euro and re-introduce the drachma.

The bank says that Macedonian foreign currency reserves are steady at over 2 billion euro.

Macedonia has had a tough time this year. Amid shrinking exports caused largely by the European crisis, the government continues to forecast 2 per cent economic growth in 2012. However, the IMF and the World Bank do not expect more than 1 per cent growth.

Last week parliament adopted a government proposal to shave 5 per cent off the 2.7 billion euro budget, making gross savings of some €120 million.

The World Bank in its latest report predicts a difficult year for all countries in the Western Balkans. The Bank forecasts shrinking economic activity generally, as well as rising unemployment.