🇲🇰 North Macedonia Inflation Eases in July, But Energy Costs Threaten the Outlook

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Key Takeaways

• July CPI eased, but energy risks remain, according to The Conference Board (2026-08-12).
• Retail inflation is estimated to average 5% in 2026-27, per ICRA via Traders Union (2026-08-13).
• Headline inflation trend shows moderation, yet energy price volatility persists.
• Core inflation data is not available in this report; sector-specific trends are limited.
• The National Bank of the Republic of North Macedonia’s policy stance remains data-dependent.

The Data

SKOPJE — North Macedonia’s consumer price index eased in July, offering some relief to households, but analysts warn that energy costs could reverse the trend. The Conference Board reported on 2026-08-12 that July CPI moderated, though it flagged lingering energy risks as a key concern for the near term.

The inflation breakdown for July shows a softer headline figure compared to recent months. However, without detailed core inflation data in this report, it is unclear whether the easing is broad-based or concentrated in specific categories. Energy prices remain the primary upside risk, as global supply disruptions continue to feed through to domestic costs.

The National Bank of the Republic of North Macedonia has not announced a rate change in this reporting window. The central bank’s next policy decision will be closely watched, as it balances the need to contain inflation against supporting economic growth. The bank has previously signaled a cautious approach, prioritizing price stability.

GDP growth data for the current period is not available in this report. However, the economy’s performance will depend heavily on how domestic demand holds up against elevated borrowing costs and persistent price pressures. Key sectors such as manufacturing and services remain sensitive to both energy input costs and consumer confidence.

Labour market data is not available in this report. Wage growth and employment trends will be critical to watch, as they determine whether households can absorb higher living costs without further dampening consumption.

Energy Prices Remain the Key Risk to the Inflation Outlook

The central story for North Macedonia right now is the tug-of-war between easing headline inflation and stubborn energy costs. The Conference Board’s July report shows that while the CPI has cooled, the risk of another spike is far from over. Energy imports and domestic price setting will dictate whether the easing trend holds.

The ICRA estimate of 5% average retail inflation for 2026-27, reported by Traders Union on 2026-08-13, suggests that prices will stay elevated even if they moderate month-to-month. This points to a prolonged period of pressure on household budgets and business input costs. The central bank’s ability to anchor expectations will be tested as global energy markets remain volatile.

What This Means

For households, the easing in July CPI is welcome but limited. If energy prices rebound, utility bills and transport costs will rise again, eating into disposable income. With inflation expected to average 5% over the next year, real wage growth will likely remain negative unless salaries increase substantially.

For businesses, the outlook is mixed. Lower headline inflation could ease pressure on input costs, but energy-intensive sectors remain exposed. Borrowing costs are still restrictive, and any further rate hikes from the central bank would squeeze margins. Firms should plan for a high-cost environment through 2026.

Outlook

The next key data release will be the August CPI report, which will show whether the July easing was a one-off or the start of a sustained trend. The National Bank of the Republic of North Macedonia’s next policy meeting will also be critical, as markets look for signals on the rate path.

Analysts expect inflation to remain above the central bank’s comfort zone for the rest of the year. The 5% average estimate for 2026-27 implies that policy normalization will be slow. The main risk is an energy price shock that could force the central bank to tighten further, even as growth slows.

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Data sourced from State Statistical Office () and National Bank of the Republic of North Macedonia (). Analysis by Economic Pulse Data Team.

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Edited by Editorial Desk. Fact-checked by Editorial Desk. This is analysis, not financial advice.