Macedonia's central bank maintained its monetary policy stance, including the main interest rate at 3.25 percent, but said there were downward risks to inflation given that inflationary pressures have been lower than expected in recent months and import prices have the potential to decline further.
The National Bank of the Republic of Macedonia (NMRM), which cut its rate by 25 basis points in 2013, also said indicators for the last quarter showed that the country's economy would continue to grow, probably at a rate similar to the third quarter.
This view is largely based on favorable developments in construction and industrial activity.
Macedonia's Gross Domestic Product expanded by an annual 3.3 percent in the third quarter, down from 3.5 percent in the second quarter.
In its latest quarterly report from October, the central bank raised its 2013 growth forecast to 3.3 percent from an April forecast of 2.2 percent, and its 2014 growth forecast to 3.7 percent from 3.0 percent due to better exports and higher investments. In 2015 growth is forecast to reach 4.4 percent with credit growth rising to 5 percent in 2013, about 6 percent in 2014 and 8 percent in 2015.
Macedonia's inflation rate fell to 1.1 percent in November from 1.3 percent in October and the central bank said average inflation in 2013 amounted to 2.8 percent, in line with the NMRM's forecast.
Growth is expected to close the negative output gap by mid-2014, with inflation averaging 2.3 percent this year and about 2.0 percent for 2015.