March 21 (SeeNews) - North Macedonia has made a big step towards membership of The Single Euro Payments Area (SEPA) by adopting a new payment system law that entered into force at the beginning of 2023, and the central bank amended 26 regulations to align them with EU rules, central bank governor, Anita Angelovska Bezhoska, said.
“Although regulatory gaps still exist, the central bank is working on a road map for fully closing them. Our plan is to finalize the preparation of the application for SEPA by June," Anita Angelovska Bezhoska told SeeNews in an interview on the sidelines of a round table talks of central bank governors from Croatia, Slovenia, Bosnia and Herzegovina, Montenegro, and North Macedonia held in Split, Croatia, last week.
Thanks to the SEPA, customers can make cashless euro payments – via credit transfer and direct debit – to anywhere in the European Union, as well as a number of non-EU countries, in a fast, safe and efficient way, just like national payments. Access to the SEPA ensures that transaction costs could be much lower for North Macedonia's citizens, especially the costs of remittances as emigration is one of the key problems that the Western Balkan countries face, Angelovska Bezhoska pointed out.
"Improving the payment systems, increasing the efficiency of savings and decreasing the cost of cross border transactions are among the central bank's priorities, because these adjustments can bring significant benefits for households, for companies and eventually boost economic growth," noted Angelovska Bezhoska. She also said that transaction costs related to exports and imports are very important for businesses, particularity for North Macedonia which is a very open economy. Cutting transactions costs for companies would help the overall growth of the economy.
"To achieve that goal, we have to focus on further aligning our regulations with the SEPA requirements and not just regulations, but also preparing our payment infrastructure to be better aligned," she added.
SEPA was launched by the European banking and payments industry with the support of national governments, the European Commission, the Eurosystem, and other public authorities. It was introduced for credit transfers in 2008, followed by direct debits in 2009, and fully implemented by 2014 in the euro area and by 2016 in non-euro area SEPA countries. Currently, the SEPA region consists of 36 European countries, including several that are not members of the euro area or the European Union.
Earlier this month, six Western Balkan countries - Albania, Bosnia and Herzegovina, Serbia, Montenegro, North Macedonia, and Kosovo - agreed to cut financial transaction fees across the region by aligning their regulations with those of countries in the SEPA this year. The first five of them are officially recognised as EU membership candidates, while Kosovo submitted its EU membership application in December 2022.
In November, North Macedonia's central bank projected 3% economic growth and inflation of 3.5 - 4.0% for 2024.
"So far, inflation rate developments have been in line with our expectations," Angelovska Bezhoska said. Last year, inflation abated to a single digit level of 9.4%. This year, the latest data showed that inflation has slowed down further, to 3% year-on-year in February.
The country’s economy expanded by 1% last year, coming below the central bank’s projection of a 1.9% increase announced in November, which according to Angelovska Bezhoska means a weaker starting position for this year's growth forecast.
In November, North Macedonia's 2024 economic growth was projected at 3%. "So these figures for 2023 in principle create maybe some downside risk for growth this year, although we have to do a more detailed analysis because the only segment which explains a lower GDP growth are investments. And the available information suggests this is mostly due to changes in inventories," Angelovska Bezhoska explained. The central bank will complete its new macroeconomic cycle of projections in May.