Economy of the Republic of Macedonia

Economy of Macedonia
Народна Банка.jpg
Currency1 Macedonian Denar (MKD) = 100 Deni
calendar уеаr
Trade organisations
WTO, CEFTA
Statistics
GDPIncrease$11.46 billion (Nominal, 2016)[1]
Increase$31.55 billion (PPP, 2017)
GDP rank129th (2016)[2]
GDP growth
3.9% (2015), 2.9% (2016),
0.0% (2017e), 2.3% (2018f) [3]
GDP per capita

Increase$6,654 (USD, 2016 est.)

Increase$14,500 (PPP, 2016 est.)[4]
GDP by sector
services: 66.5%
industry: 25.2%
agriculture: 8.4% (2016) [4]
Increase0.3% (CPI, 2017 est.)[4]
Population below poverty line
Positive decrease21.5% (2015)[5]
Increase33.6 (2016)[6]
Labour force
954,814 (2017)[7]
Labour force by occupation
services: 53.8%
industry: 29.6%
agriculture: 16.6% (2016)[4]
UnemploymentPositive decrease21.1% (2018, Q2)[8]
Average gross salary
34,079 MKD / 687 $, monthly (2017)[6]
23,196 MKD / 468 $, monthly (2017) [6]
Main industries
food processing, beverages, textiles, chemicals, iron, steel, cement, energy, pharmaceuticals
11th (2018)[9]
External
ExportsIncrease$5.805 billion (2017)[6]
Export goods
food, beverages, tobacco; textiles, miscellaneous manufactures, iron, steel, automotive parts, buses
Main export partners
 Germany 48.1%
 Bulgaria 5.7%
 Serbia 4%
 Belgium 3.5%
 Greece 3.5% (January–April 2017)[10]
ImportsIncrease$6.446 billion (2017)[6]
Import goods
machinery and equipment, automobiles, chemicals, fuels, food products
FDI stock
Increase$6.277 billion (31 December 2015 est.)
Negative increase$8.07 billion (2017)
Public finances
Positive decrease 47.3% of GDP (2017) [11]
RevenuesIncrease$3.314 billion (2017 est.)[4]
Standard & Poor's:[12]
BB-(Domestic)
BB-(Foreign)
BB(T&C Assessment)
Outlook: Stable[13]
Fitch:[13]
BB+
Outlook: Stable
Foreign reserves
Decrease$2.615 billion (31 December 2015)
Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars.

The breakup of Yugoslavia in 1991 deprived the economy of the Republic of Macedonia, then its poorest republic (only 5% of the total federal output of goods and services), of its key protected markets and large transfer payments from Belgrade. An absence of infrastructure, United Nations sanctions on its largest market the Federal Republic of Yugoslavia,[14] and a Greek economic embargo hindered economic growth until 1996.

Worker remittances and foreign aid have softened the subsequent volatile recovery period. GDP has increased each year except in 2001, rising by 5% in 2000. However, growth in 1999 was held down by the severe regional economic dislocations caused by the Kosovo war.

Successful privatization in 2000 boosted the country's reserves to over $700 million. Also, the leadership demonstrated a [15] continuing commitment to economic reform, free trade, and regional integration. The economy can meet its basic food needs but depends on outside sources for all of its oil and gas and most of its modern machinery and parts. Inflation jumped to 11% in 2000, largely due to higher oil prices.

The Republic of Macedonia experiences one of Europe's biggest growth rates at an average of 4% (even during the political crisis) making it comparable to nations such as Romania and Poland.

History

Macedonia's economy has almost always been completely agricultural in nature from the beginning of the Ottoman Empire when it was part of the District of Üsküp and Province of Salonika. It concentrated on pasture farming and vineyard growing. Opium poppy, introduced into the region in 1835, became an important crop as well by the late 19th century, and remained so until the 1930s.[16]

The role of industry in the region's economy increased during the industrial age. Macedonia was responsible for large outputs of textiles and several other goods in the Ottoman Empire. However, outdated techniques to produce the goods persisted. The stagnation of the Macedonian economy began under the rule of the Kingdom of Serbia.

When World War II ended, the local economy began to experience revitalization by way of subsidies from Federal Belgrade. The subsidies assisted Macedonia to redevelop its lost industry and shift its agricultural-centered economy to an industry-centered economy with new hearts of industry emerging all over the country in Veles, Bitola, Shtip and Kumanovo. Previously, Skopje was the only industrial center in Macedonia, this expanded to several other cities during Socialist Yugoslavia.

After the fall of Socialist Yugoslavia, the economy experienced several shocks that damaged the local economy. Starting with the Western embargo on the Yugoslavian common market, and ending with the Greek embargo on Macedonia over the country's name. The economy began to recover in 1995 and experienced a full recovery after the 2001 insurgency by ethnic Albanians. Macedonia's GDP grew by an average of 6% on a yearly basis until the 2008 economic crisis when its economy contracted with the rest of the world. The global crisis had little impact on the country due to Macedonian banks' stringent rules. Macedonia today maintains a low debt-to-GDP ratio and is experiencing a revitalized investment interest by companies from Turkey, Algeria, Albania, and others.

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