Government's policy for liberalisation of the key production markets including the telecommunication market begin to show results. Taking into the consideration the fact that the official and indirect indicators show strengthened economic activities, the real GDP for this year will likely surpass the programme projection at the level of 4,5%, Head of IMF Mission Mark Griffiths said at Tuesday's press conference.
IMF Mission precedes the preparations for completing the Third Review under the Stand-By Arrangement with Macedonia.
The programme of the government with the International Monetary Fund, Griffiths said, has two-year reviews out of which the last is successfully completed three months ago and in numerous sphere a progress was achieved towards ending the review and main programme's macroeconomic targets defined by the end of June are completed.
- Fiscal position is becoming strong, international reserves have increased and despite of the early debt repayment to international institutions amounting to US$300 million the interest rates of the central bank are low. The annual budget rebalance maintains the target of the fiscal deficit at the level of 1% from the GDP which will provide the macroeconomic stability, Griffiths said.
According to him the incomes are expected to be surpassed by around of 1,5% of the GDP in relation to the central budget, which enables spending of the government, mainly investing, to be adequately increased.
- Structural reforms are also carried out. The new Law on banks adopted by the Parliament on May should contribute in attracting foreign banks and strengthening the banking supervision. The revised Law on National Bank is in preparation which will provide independence of the National Bank of the Republic of Macedonia and will strengthen its financial situation, Griffiths said.
On March 1, 2007, the Parliament adopted law on harmonisation of the bases for social insurance contributions. IMF Mission encourages government's efforts in this regard and efforts to formulate strategy, which will fully harmonise the personal income tax and social contributions, Griffiths said.
- Payment of the contribution to workers that work with shortened working hours based on full-time working hours should be stopped. The payments of social contributions to low salary workers should be gradually reduced. It will help in reduction of labour tax, to reduce the dimension of informal economy and to cut down unemployment, Griffiths said.
Assessing that a solution should be found about fiscal risks, which emerge from higher electricity import prices, he added that IMF supports the government in development and conducting overall plan for energy sector in close cooperation with the World Bank.
Finance Minister Trajko Slaveski said that all quantitative targets for the first half of this year are fulfilled and surpassed and that the most impressive situation is with the foreign exchange reserves which are increased, fiscal balance as target is realised, fiscal position of the country is very strong and structural reforms are giving the results.
- Foreign exchange reserves by June 30 this year amount 1,4 billion Euro. According to IMF methodology the total public debt amounts 1,9 billion Euro and internal debt is 844 million Euro, Slaveski said.
The Governor of the National Bank of the Republic of Macedonia Petar Gosev said that the inflation from the aspect of the Central bank is still under control, the planned rate of 2,5% will be lower and will amount around of 1,5%, and deficit of the current account instead of the projected 3,2% is expected to be lower by one percent which is a result of the trade balance and better influx of private transfers.
- These measures of the monetary and fiscal policy enable delivery of high monetary aggregates which in direction to support of the economic activities. Due to large growth the deposits especially Denar deposits, which are expected to be higher by 42% by the end of the year, enable growth of the credits in the private sector for about 30% which is very dynamic credit support to the economy which will be reflected in further enhancement of the economic growth of the country, Gosev said.
IMF mission paid a visit to Skopje from July 11 to 24 aimed at starting the talks for the Third Review under Stand-By Arrangement.

























The massive wildfire that started in pine forest near Bitola on Monday and spilled over to the city's suburbs has been put under control. The situation is still critical in the village of Dragarino, where firefighting efforts are hampered by inaccessible terrain.
Makfax correspondent said President Branko Crvenkovski arrived in Bitola earlier today.
"The major hazard has been thwarted. Nonetheless, the firefighters, the soldiers and all those engaged in the operation will remain alert and be ready for preventive action," Crvenkovski said after touring the hardest-struck areas.
Assistance from neighboring municipalities fueled in constantly. The municipalities dispatched vehicles and volunteers to battle the blaze. Some 2.000 people have been engaged in firefighting efforts on the ground, including five firefighting airplanes and two helicopters.
Croatian Kanader airplane is on its way Macedonia to help the country cope with the massive wildfires, upon a request of the Macedonian government.
"I am not confident that we will finish the job today as baking weather and strong winds hamper the firefighting efforts. The real picture of the fire will be available later today," Bitola Mayor Vladimir Taleski said.
There was no immediate word on the material damage caused by the fire. The authorities have not established the cause of the fire that killed a local resident and injured dozen of locals.