Macroeconomic Forecast Macedonia

Macedonia's broad money (M4) stock fell to MKD192.58bn in January from MKD195.86bn in December, a 2.9% y-o-y contraction. At the same time, the amount of cash in circulation (M0) also fell to MKD15.92bn from MKD17.60bn. We caution that these are both negative signs for the Macedonian economy, signalling both a drawdown in deposits and capital flight away from the local currency. We have cut our 2009 M4 money supply growth forecast to only 4.7%, bringing the end-year total to MKD205.00bn.

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