National Bank of the Republic of North Macedonia governor says monetary tightening curbed inflation and calls for vigilance as core pressures persist

The National Bank of the Republic of North Macedonia published remarks by Governor Anita Angelovska-Bezhoska from a governors’ panel at the Central and Eastern Europe Forum in Vienna, where she argued that central banks’ monetary tightening played a key role in controlling inflation by stabilising inflation expectations, even though the inflation surge reflected multiple factors rather than a purely monetary phenomenon. She cited empirical findings and European Central Bank estimates that euro area consumer prices would have been 2.5 to 3 percentage points higher in 2024 without monetary tightening, and described the current cycle as one of the most synchronised and strongest monetary responses in around the past 50 years after a prolonged period of low interest rates. Policy calibration was presented as helping bring inflation down from double-digit rates to low single-digit growth while avoiding recession and preserving macrofinancial stability, with economic activity in Central, Eastern and Southeast Europe continuing to recover and financial institutions remaining resilient as capital adequacy improved. She flagged ongoing risks to medium-term price stability, pointing to greater persistence in core inflation, wage growth and the need for fiscal consolidation across the region, and argued that longer-term resilience to large shocks will require structural reforms including supply-chain diversification, increasing domestic production potential and reducing energy intensity.