🎧 Listen to This Article
On March 26, 2025, credit rating agency Fitch confirmed that North Macedonia has maintained its BB+ credit rating with a stable outlook. The agency praised the country’s credible and consistent macroeconomic policies, underpinned by a long-standing fixed exchange rate policy and strong governance indicators compared to other countries with similar economic performance. The country’s commitment to reforms within the EU accession process was also highlighted.
Despite external challenges, North Macedonia’s real GDP growth reached 2.8% in 2024, outperforming expectations due to strong public consumption and investments. Fitch projects the economy to grow by 4% by 2026, driven by the implementation of investments in corridors 8 and 10d.
The report also noted that foreign direct investment (FDI) in the country is at its highest in the last 17 years, amounting to 7.1% of GDP in 2024, primarily due to high investments in the country’s free economic zones. However, Fitch warned that low productivity growth and unfavorable demographic trends remain as limiting factors for medium-term growth.
Unemployment remains structurally high, due to skill shortages and uneven regional economic development. However, wage growth has been strong, averaging 13% annually between 2022 and 2024, without negatively affecting competitiveness.
Regarding fiscal matters, Fitch noted a budget deficit of 4.6% in 2024, lower than the revised deficit target of 4.9%, driven by higher revenues and under-execution of capital expenditures. Fitch does not expect any changes to the budget deficit in 2025, given the projected higher capital expenditure and the normalization of pension and social fund expenses.
The implementation of e-invoicing is expected to positively impact revenue generation, and grants from the Western Balkans Growth Plan are expected to reduce the deficit to 4% by 2026. Fitch also projected that the country’s medium-term debt will exceed 58% of GDP.
Inflation in 2024 averaged 4.2%, driven by strong wage growth, increased domestic demand, and robust credit growth in the private sector.
Fitch’s credit ratings are based on analyses of the country’s policies and are critical indicators for investors. These ratings are updated biannually by Fitch and Standard & Poor’s.
For further details, clarification, contributions, or any concerns regarding this article, please contact us at editorial@tax.news. We value your feedback and are committed to providing accurate and timely information. Please note that our privacy policy will handle all inquiries
