Hungary grants large loan to North Macedonia

The loan, granted on favourable terms, means considerable savings for the country compared to the international financial markets and is intended to promote economic growth. The state export credit agency EXIM signed a corresponding agreement on Tuesday, reported the business portal portfolio.hu based on international sources.

Budget support

This loan would capitalise 500 million euros in budget support for local development projects and economic support for settlements, said North Macedonian Finance Minister Gordana Dimitrieska-Kochoska.

The loan has a term of 15 years at an interest rate of 3.25% and includes a repayment-free period of three years. The government deliberately opted for this arrangement instead of a new euro bond. Considering the current international market interest rates of around 6% per annum, this will save around EUR 14 million in interest and minimise refinancing risks at the same time.

Investment boost in the private sector

Part of the total amount will be granted as low-interest loans to local companies. This should enable an investment cycle of more than 500 million euros in the private sector and help to stimulate the economy. The loan agreement is part of the economic co-operation agreement signed between the governments of Hungary and North Macedonia in July.