Macroeconomic Forecast Macedonia

The budget deficit reached EUR111mn (1.3% of GDP) through to the end of July, according to latest preliminary data. The monthly budget showed a small surplus (EUR13mn) in July, but we expect the shortfall to widen to 2.7% of GDP by the end of the year. This is just above the 2.5% of GDP official budget deficit target, though would mark a stabilisation from 2009. We remain cautious that a region-wide downturn in 2011 could weigh on public finances that year, posing a risk to our 2.7% of GDP budget deficit forecast.

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