Macedonia Economic Outlook

May 12, 2020

The economy is in a fragile state in H1 as the Covid-19 shock has derailed momentum. The state of emergency is causing the unemployment rate to rise even further and dampening consumer spending, as reflected in the marked decline in retail sales in March. Moreover, the external sector is struggling as activity in major trading partners, particularly Germany, is stalled by the pandemic. Merchandise exports shrank at the sharpest pace in over seven years in March and will likely contract further in Q2. This is having negative knock-on effects for the manufacturing and transport sectors, as evidenced by the over 14% contraction in manufacturing output in the same month. Meanwhile, the pandemic will likely temporarily delay ongoing EU accession reform efforts.

North Macedonia Economic Growth

The economy is facing a recession this year. The lockdown in H1, an unfavorable labor market and falling incomes will depress consumer spending, while investment will decline amid heightened uncertainty and weaker FDI. Moreover, dependence on EU markets for trade will limit merchandise exports. Fiscal and monetary stimulus should help soften the slowdown, however. FocusEconomics panelists forecast GDP to contract 4.5% in 2020, which is down 5.8 percentage points from last month’s forecast, and to grow 5.4% in 2021.

North Macedonia Economy Data

	2015	2016	2017	2018	2019
Population (million)	2.1	2.1	2.1	2.1	2.1
GDP per capita (USD)	4,889	5,174	5,504	6,007	6,194
GDP per capita (EUR)	4,381	4,656	4,838	5,151	5,459
GDP (USD bn)	10.1	10.7	11.4	12.5	12.9
GDP (EUR bn)	9.1	9.7	10.0	10.7	11.3
Economic Growth (GDP, annual variation in %)	3.9	2.8	1.1	2.7	3.6
Consumption (annual variation in %)	4.4	3.9	2.1	3.7	3.5
Investment (annual variation in %)	8.3	12.5	-2.2	-7.3	6.6
Industrial Production (annual variation in %)	4.9	3.3	0.2	5.4	3.7
Unemployment Rate	26.1	23.7	22.4	20.7	17.3
Fiscal Balance (% of GDP)	-3.5	-2.7	-2.7	-1.8	-2.0
Public Debt (% of GDP)	38.1	39.9	39.4	40.6	40.2
Money (annual variation of M2 in %)	7.7	6.2	3.8	11.8	9.9
Inflation Rate (CPI, annual variation in %)	-0.3	-0.2	1.4	1.4	0.8
Policy Interest Rate (%)	3.25	3.75	3.25	2.50	2.25
Exchange Rate (vs USD)	56.55	58.50	51.28	53.80	54.86
Exchange Rate (vs USD, aop)	55.43	55.69	54.63	52.18	54.96
Exchange Rate (vs EUR)	61.41	61.52	61.53	61.71	61.50
Exchange Rate (vs EUR, aop)	61.50	61.61	61.60	61.56	61.46
Current Account (% of GDP)	-1.9	-2.9	-0.8	-0.2	-2.7
Current Account Balance (EUR bn)	-0.2	-0.3	-0.1	0.0	-0.3
Trade Balance (EUR billion)	-1.8	-1.8	-1.8	-1.7	-2.0
Exports (EUR billion)	3.0	3.5	4.1	4.9	5.3
Imports (EUR billion)	4.9	5.3	5.9	6.6	7.3
Exports (annual variation in %)	9.4	15.8	15.5	19.8	9.1
Imports (annual variation in %)	5.0	9.7	9.7	12.9	10.2
International Reserves (EUR)	2.3	2.6	2.3	2.9	3.3
External Debt (% of GDP)	66.8	70.0	74.8	70.1	-

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North Macedonia Facts

	Value	Change	Date
Exchange Rate	54.86	-0.56 %	Jan 01
Stock Market	0.1	0.0 %	Jan 07

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Macedonia Economic Outlook

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