## 1mkdea2023001

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**Canonical URL:** [1mkdea2023001](https://www.imf.org/-/media/files/publications/cr/2023/english/1mkdea2023001.pdf)

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### Fund Relations
- Missions:
  - Article IV, by videoconference, November 23–December 10, 2021.
  - Staff team: Ms. Barkbu (head), Messrs. Gade, Mangov, and Roldan (all EUR), and Mses. Eble (Resident Representative) and Kovachevska Stefanova (IMF Local Economist).
  - Discussions with Finance Minister Besimi, Governor Angelovska Bezhoska, Labor and Social Policy Minister Shahpaska, other senior officials, and representatives from the banking, business, political, and international communities.
- Membership Status:
  - Joined 12/14/1992; Article VIII.
- General Resources Account (SDR Million / Percent of Quota):
  - Quota 140.30 100.00
  - Fund holdings of currency 140.30 100.00
  - Reserve position 0.00 0.00
- SDR Department (SDR Million / Percent of Allocation):
  - Net cumulative allocation 200.09 100.00
  - Holdings 1.06 0.53
- Outstanding Purchases and Loans (SDR Million / Percent of Quota):
  - Emergency assistance (RFI) 140.30 100.00
- Latest Financial Commitments:
  - RFI: Approval Date 04/10/2020, Expiration Date 04/15/2020, Amount Approved (SDR Million) 140.30, Amount Drawn (SDR Million) 140.30
  - PLL (formerly PCL): Approval Date 01/19/2011, Expiration Date 01/18/2013, Amount Approved (SDR Million) 413.40, Amount Drawn (SDR Million) 197.00
  - Stand-By: Approval Date 08/31/2005, Expiration Date 08/30/2008, Amount Approved (SDR Million) 51.68, Amount Drawn (SDR Million) 10.50
  - Stand-By: Approval Date 04/30/2003, Expiration Date 08/15/2004, Amount Approved (SDR Million) 20.00, Amount Drawn (SDR Million) 20.00
- Projected Payments to the Fund (Expectation Basis) (SDR million; based on existing use of resources and present holdings of SDRs):
  - Forthcoming 2022 2023 2024 2025 2026
  - Principal 35.08 70.15 35.08
  - Charges/Interest 1.64 1.60 0.97 0.28 0.16
  - Total 1.64 36.68 71.12 35.36 0.16
- Exchange Arrangement:
  - De jure arrangement: floating.
  - Under the Law on Foreign Exchange Operations (Article 33), denar exchange rate is freely determined on the basis of supply and demand.
  - NBRNM participates in the foreign exchange market (Article 34) to achieve monetary and foreign exchange policy goals.
  - Monetary strategy: targeting the nominal exchange rate against the euro; intermediary objective: maintain a stable denar exchange rate.
  - NBRNM maintains a stable exchange rate within a narrow band of bid-ask exchange rates determined by the Committee for Operational Monetary Policy.
  - De facto arrangement classified as a stabilized arrangement.
  - North Macedonia has accepted obligations of Article VIII, Sections 2, 3 and 4 and maintains an exchange system free of multiple currency practices and restrictions on current international transactions.
- Article IV Consultations:
  - First consultation concluded August 1993.
  - Last consultation concluded January 22, 2020 (IMF Country Report 20/24).
  - North Macedonia is on the standard 12-month Article IV consultation cycle.
- Technical Assistance Since 2016 (major themes and departments):
  - Public Debt Management: MCM/WB January 2017
  - Public Expenditure and Financial Accountability: FAD/WB December 2021
  - Public Financial Management: FAD September 2019
  - Public Investment Management: FAD February 2020; July 2021
  - Public-Private Partnership Law: FAD January 2021
  - Cash Management (in broader PFM reforms): FAD October 2017
  - Organic Budget Law: FAD December 2017
  - Fiscal Rule and Fiscal Council: FAD February 2018
  - Fiscal Transparency Evaluation: FAD April 2018
  - Credit Guarantee Scheme: FAD July 2020
  - Tax Policy and Administration (multiple missions across 2016–2021): FAD (dates include January 2017; September 2017; April 2016; May 2016; July 2016; May 2017; September 2017; March 2018; December 2018; March 2019; May 2019; January 2021)
  - Tax IT System Improvement: FAD May 2017; September 2017; May 2021
  - Taxpayer Registration: FAD November 2018
  - Tax Treaty Policy: FAD October 2019
  - Tax Audit Function (multiple missions 2016–2020): FAD February 2016; November 2016; March 2017; February 2018; March 2020; May 2021
  - Tax Arrears Management: FAD September 2018; November 2019; April 2021; December 2021
  - Taxpayer Services: FAD November 2021
  - Management Reporting System and KPIs: FAD March 2021
  - Large Taxpayers Office: FAD March 2016; October 2019
  - Personal Income Taxation: FAD December 2021
  - Property Tax System: FAD September 2017; April 2018
  - Transfer Pricing and Related International Issues: FAD September 2017; December 2018
  - Tax Compliance Management: FAD October 2016; November 2016; October 2018; October 2019; February 2020; October 2021
  - Value Added Tax: August 2021
  - Government Finance Statistics: STA June 2016; November 2016; February 2017; July 2017; November 2017; March 2018; June 2018; November 2018; March 2019; July 2019; November 2019; September 2020; April 2021; October 2021
  - External Sector Statistics: STA April 2017
  - Sectoral Financial Accounts and Balance Sheet Statistics: STA October 2018
  - Stress Testing the Banking Sector: MCM June/July 2021
  - Emergency Liquidity Assistance: MCM February 2021
  - Central Bank Governance: MCM September 2020
  - National Bank Law: LEG October 2020; March 2021
  - FSAP and ROSCs: MCM/WB May-June 2003; update April 2018; July 2018; September 2018; Central Bank Transparency Review (Pilot) MCM/LEG June 2021
  - Regional advisors: Revenue Administration FAD 2015-; Public Financial Management FAD 2015-

### IMF–World Bank Collaboration
- Background:
  - Bank and Fund country teams maintain close collaboration, seeking synergies and harmonizing policy recommendations.
  - Teams broadly agree in their assessment of the economic situation.
- World Bank Country Partnership Framework (CPF) 2019–2023:
  - Strategic objective: support North Macedonia’s ability to achieve faster, inclusive, and sustainable growth and provide greater opportunities for its citizens.
  - CPF focuses on three areas:
    - Focus Area I — Export-led growth: Improve the environment for a competitive private sector (remove bottlenecks, improve connectivity and access to markets, support hard and soft trade connectivity, strengthen firms’ technological uptake, innovation, access to finance, and capacities).
    - Focus Area II — Inclusive growth: Expand skills and opportunities for the most vulnerable (develop human capital and skills, improve quality and relevance of education, and access to and quality of social services).
    - Focus Area III — Sustainable growth: Enhance sustainability and build resilience to shocks (strengthen fiscal and public financial management; accelerate transition to a more sustainable energy mix).
  - 2021 Performance and Learning Review findings:
    - Progress uneven across the three areas.
    - Notable results in market accessibility, connectivity, education, health and social services (including support for those most hit by the Covid-19 pandemic).
    - Limited progress toward enhancing sustainability and building resilience to shocks due to Covid-19; more remains to be done to strengthen sustainability of public finances.
    - Modest progress on energy efficiency and renewable energy outcomes.
- World Bank lending and portfolio (FY19–FY23):
  - To date, eight new IBRD projects approved, total US$508.6 million; three other projects under preparation.
  - Current World Bank portfolio: nine active projects totaling US$480 million, of which 70 percent remain undisbursed.
  - Reasons for undisbursed share: young portfolio, limited fiscal space, delayed effectiveness following pandemic and 2020 elections.
  - No project is at risk; implementation according to original schedule; disbursement ratio above 30 percent in FY21.
- IBRD Lending (Representative projects and amounts):
  - Western Balkans Trade and Transport Facilitation Project (IPF, US$30 million)
  - Local Roads Connectivity Project (IPF, US$78 million) and Additional Financing (IPF, US$44.8 million)
  - Agriculture Modernization (IPF, US$50.5 million)
  - Social Insurance Modernization Project (IPF, US$15.7 million)
  - Primary Education Improvement Project (IPF, US$25 million)
  - Public Finance and Competitiveness DPO (US$139.3 million)
  - Public Sector Energy Efficiency (IPF, US$27.4 million)
  - Emergency Covid-19 Response (IPF, US$98.5 million)
  - Total CPS FY19–FY23 amount: US$508.6 million
  - Proposed lending FY22–FY23 (about US$88 million):
    - Building Effective, Transparent, and Accountable Public Finances (IPF, US$18 million)
    - Municipal Finance (IPF, US$50 million)
    - Air Quality Improvement Project (IPF, US$20 million)

### Statistical Issues
- Assessment of Data Adequacy for Surveillance (as of January 18, 2022):
  - General: Data provision has some shortcomings but is broadly adequate for surveillance; national accounts and government finance statistics need further improvement.
  - National accounts:
    - Quality needs improvement.
    - 2013 Government Decision amended National Classification of Activities—NKD Rev.2, harmonized with NACE Rev.2, entailing significant changes in decomposition of historical data.
    - NBRNM developed experimental financial accounts statistics and published financial accounts position stock data in December 2020.
  - Price statistics:
    - Improvements to CPI introduced to align COICOP with international standards and EU regulations.
  - Government finance statistics (GFS):
    - GFS data improving, aided by ongoing GFS Technical Assistance.
    - Authorities disseminate monthly central government operations, quarterly general government operations, and quarterly debt data on their website and SDDS National Summary Data Page.
    - Disseminated data are in a national presentation, on a cash basis, and do not cover whole of general government as defined in GFSM 2001/14, but data quality is generally good.
    - Authorities report detailed revenue and expenditure data for inclusion in the Annual GFS database and are taking steps to publish general government data in GFSM 2014 presentation for inclusion in International Financial Statistics.
    - Central government debt data reported to IMF / World Bank Quarterly Public Sector Debt Database.
  - Monetary and financial statistics:
    - NBRNM compiles monetary data in line with 2016 MFSMCG recommendations.
    - Data reported through Standardized Report Forms for central bank, other depository corporations, and other financial corporations to IMF’s Statistics Department regularly and timely.
    - North Macedonia reports several Financial Access Survey indicators, including commercial bank branches per 100,000 adults and ATMs per 100,000 adults (SDG Target 8.10 indicators).
  - Financial sector surveillance:
    - NBRNM compiles and reports all core and eight encouraged Financial Soundness Indicators (FSIs) for deposit-takers quarterly and annual data for eight additional encouraged FSIs for other sectors; all published on IMF’s FSI website.
  - External sector:
    - External sector statistics meet international standards.
    - Authorities compile and disseminate quarterly balance of payments data, quarterly IIP data, reserve assets and foreign currency liquidity data, and external debt statistics.
    - Participation in Coordinated Direct Investment Survey and Coordinated Portfolio Investment Survey.
    - Authorities are working to resolve long-standing discrepancy between changes in IIP stock and corresponding balance of payments transactions for currency and deposits assets of nonfinancial sectors.
- Data Standards and Quality:
  - Adherence to SDDS Plus since January 28, 2019; metadata posted on DSBB.
  - Four data categories under SDDS Plus transition plans: sectoral balance sheets, general government operations, general government gross debt, and debt securities.
  - Latest SDDS Plus Annual Observance Report available on DSBB.
  - A Data ROSC was published on September 29, 2004.
- Table of Common Indicators Required for Surveillance (as of January 18, 2022):
  - Exchange Rates: Date of Latest Observation 01/14/22; Date Received 01/14/22; Frequency of Data D; Frequency of Reporting W; Frequency of Publication D
  - International Reserve Assets and Reserve Liabilities of the Monetary Authorities: Date of Latest Observation Nov. 2021; Date Received 01/06/22; Frequency of Data M; Frequency of Reporting M; Frequency of Publication M
  - Reserve/Base Money: Date of Latest Observation Nov. 2021; Date Received 01/06/22; Frequency: M M M
  - Broad Money: Date of Latest Observation Nov. 2021; Date Received 12/21/21; Frequency: M M M
  - Central Bank Balance Sheet: Date of Latest Observation Nov. 2021; Date Received 12/30/21; Frequency: M M M
  - Consolidated Balance Sheet of the Banking System: Date of Latest Observation Nov. 2021; Date Received 12/21/21; Frequency: M M M
  - Interest Rates: Date of Latest Observation Nov. 2021; Date Received 12/30/21; Frequency: M M M
  - Consumer Price Index: Date of Latest Observation Dec. 2021; Date Received 01/10/22; Frequency: M M M
  - Revenue, Expenditure, Balance and Composition of Financing – General Government: Date of Latest Observation Sep. 2021; Date Received 11/15/21; Frequency: Q Q Q
  - Revenue, Expenditure, Balance and Composition of Financing – Central Government: Date of Latest Observation Dec. 2021; Date Received 01/04/22; Frequency: M M M
  - Stocks of Central Government and Central Government-Guaranteed Debt: Date of Latest Observation Sep. 2021; Date Received 10/29/21; Frequency: Q Q Q
  - External Current Account Balance: Date of Latest Observation Sep. 2021; Date Received 11/30/21; Frequency: M Q Q
  - Exports and Imports of Goods and Services: Date of Latest Observation Sep. 2021; Date Received 11/30/21; Frequency: M Q Q
  - GDP/GNP: Date of Latest Observation Sep. 2021; Date Received 12/07/21; Frequency: Q Q Q
  - Gross External Debt: Date of Latest Observation Sep. 2021; Date Received 12/30/21; Frequency: Q Q Q
  - International Investment Position: Date of Latest Observation Sep. 2021; Date Received 12/30/21; Frequency: Q Q Q
  - Notes on frequency codes: D = Daily; W = Weekly; M = Monthly; Q = Quarterly; A = Annually; I = Irregular; NA = Not Available.

*Informational Annex on Republic of North Macedonia prepared by IMF staff; completed January 28, 2022.*

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_Source: https://www.imf.org/-/media/files/publications/cr/2023/english/1mkdea2023001.pdf_