IMF lends $191.8 million to North Macedonia to soften coronavirus COVID-19 blow

Sarajevo: The International Monetary Fund will disburse $191.8 million in emergency aid to North Macedonia to help it cope with the economic impact of the COVID-19 pandemic, the IMF said on Friday.

The loan, which has been approved under the lender`s Rapid Financing Instrument (RFI), will help the tiny Balkan country finance the health and macroeconomic stabilization measures and meet the urgent balance of payments needs arising from the virus crisis, the IMF said.

The Washington-based lender decided earlier this week to disburse emergency aid equalling 100% of quotas that its members have with the IMF. The loans are provided in the form of immediate disbursements.

The coronavirus pandemic has taken a major toll on the North Macedonia economy, the lender said, forecasting a 4% decline in the real gross domestic product in 2020 due to a fall in both domestic and external demand.

Macedonia had projected its GDP would grow 3.8% this year. The country has recorded 711 cases of coronavirus infection and 32 deaths.

"The authorities quickly responded with targeted and temporary fiscal policy support to limit the social and economic impact of the health emergency," Tao Zhang, the IMF Executive Board Deputy Managing Director and Acting Chair, said in a statement.

Zhang said the country`s central bank has cut its monetary policy rate and implemented regulatory changes to encourage banks to restructure debts of high-quality borrowers affected by the pandemic.

He also said the authorities have committed to rebuild fiscal buffers once the crisis is over and implement the structural reforms needed to preserve debt sustainability and speed up income convergence to European Union countries.

Last month, the EU has pledged to start membership negotiations with North Macedonia and Albania after two years of delays.

North Macedonia has become NATO`s newest member earlier this month following a long process that included a change to the country`s name.