World Bank Offers Macedonia $100 Million

Macedonian Central Bank | Photo by: Balkan Insight

The World Bank expressed readiness to advance the cash at a joint World Bank/IMF meeting in Washington with Macedonian Finance Minister Zoran Stavreski.

Macedonia earlier this month was forced to shave some 5 per cent off its budget for 2012. Cuts of 120 million euros from the 2.7 billion euro budget reflected the need to reduce spending as a result of the European crisis and the cold winter, the Finance Minister said at the time.

Macedonia's economy is strongly linked to the struggling European economy as roughly 60 per cent of its exports go to the EU.

The government has also lowered its forecast of economic growth for 2012 from 4.5 per cent to 2.5 per cent.

Macedonia earlier this month took a loan of 250 million euros from Deutsche Bank to fill the gap in the readjusted budget and refinance euro loan stock. The interest on the bank loan is 6.83 per cent and Macedonia has to return the money in five years.

In November 2011, Macedonia borrowed 130 million euros from the Deutsche Bank and Citibank with a guarantee from the World Bank.

The Central Bank governor, Dimitar Bogov, recently expressed hopes that economic growth will strengthen towards the end of the year, when some experts expect signs of recovery in the European economy.