overview of the macedonian economy...overview of the macedonian economy . u.s. embassy skopje ....

Overview of the Macedonian Economy

U.S. Embassy Skopje

Important events • September 8th, 1991, a referendum on sovereignty and

independence • November 17th, 1991, Constitution was adopted • April 26th, 1992, monetary independence and introduction of

new national currency - Denar • April 8th, 1993, Macedonia became the 181st member of the

UN • April 1993, Macedonia became a member of the World Bank

and the IMF • April 4th, 2003, Macedonia became a member of the WTO • November 2005, Macedonia became candidate country for

membership in the EU

Demography

• Total area: 25,713 square km • Total population: 2.0 million • Growth rate: 0.4% • Rural: 40.2% • Urban: 59.8%

Source: State Statistical Office of the Republic of Macedonia

Ethnic composition

Source: Census 2002, State Statistical Office of the Republic of Macedonia

64.18%

2.36%

25.17%

2.66%1.78%

3.85%

Macedonians

Albanians

Turks

Roma

Serbs

Others

Gross Domestic Product (in %) 2002 1.5% ⇓ 2003 2.2% ⇓ 2004 4.7% ⇓ 2005 4.7% ⇓ 2006 5.1% ⇓ 2007 6.5% ⇓ 2008 5.5% ⇓ 2009 -0.4% ⇓ 2010 3.4% ⇓ 2011 2.3% ⇓ 2012 -0.5% ⇓ 2013 2.7% ⇓ 2014 3.5% (projection)

Kosovo crisis

Ethnic conflict


World economic crisis

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Q1

'14

Q2

'14

2014

GDP per capita (in US$) 2002 1,992 ⇓ 2003 2,451 ⇓ 2004 2,804 ⇓ 2005 3,080 ⇓ 2006 3,380 ⇓ 2007 4,100 ⇓ 2008 4,864 ⇓ 2009 4,599 ⇓ 2010 4,581 ⇓ 2011 5,096 ⇓ 2012 4,726 ⇓ 2013 5,211

Source: Ministry of Finance of the Republic of Macedonia

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Main components of GDP in Q2 2014

Mining, quarrying, manufacturing and electricity, gas and water supply

Trade (wholesale and retail) Public administration and defense,

compulsory social security, education, health and social work

Real estate activities Construction Information and communication Agriculture, forestry and fishing Professional, scientific, technical

activities, administrative services Financial and insurance activities Arts, entertainment and recreation,

other services

17.1

11.6

11.5

6.3

14.9

5.2

6.5


6.3% 17.1%

11.5% 14.9% 6.5%

5.2%

11.6%

5.3% 13.6%

1.7% 13.6

5.3

1.7

Inflation (average rate = period / last year’s period)

* projected Source: National Bank of the Republic of Macedonia

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

I.201

3 II III

IV V VI

VII

VII

I

IX X XI

2013

I.201

4 II III

IV V VI

VII

VII

I

IX

2014

*

Industrial output (average rate = period / last year’s period)


0

1

2

3

4

5

6

7

I.201

3 II III

IV V VI

VII

VII

I

IX X XI

2013

I.201

4 II III

IV V VI

VII

VII

I

Industrial output by branches (% change)


Structure I-VIII '14 I-VIII '13

I-VIII '14 I-VIII '13

Total 100.00 104.3 4.3Manufacturing 75.52 110.4 10.4Production of basic metals 7.94 100.6 0.6Food production 13.02 105.5 5.5Production of wearing apparel 11.16 107.3 7.3Production of other non-metallic minerals 5.14 108.9 8.9Tobacco industry 4.68 96.9 -3.1Beverages production 5.82 106.8 6.8Production of coke and refined petroleum products 0.10 0.7 -99.3Production of electrical equipment 2.50 132.9 32.9Production of fabricated metal products, except machinery and equipment 1.50 98.6 -1.4Production of basic pharmaceuticals and pharmaceutical preparations 3.12 100.7 0.7Production of chemicals and chemical products 1.48 116.9 16.9Production of rubber products and plastics 2.97 127.2 27.2Production of leather and other leather products 1.12 95.8 -4.2Textile industry 1.74 114.5 14.5Electricity, gas, steam, and air conditioning supply 12.60 77.5 -22.5Mining and quarrying 11.88 97.2 -2.8

Foreign trade (in million US$)

Source: National Bank of the Republic of Macedonia

0500

1,0001,5002,0002,5003,0003,5004,0004,5005,0005,5006,0006,5007,0007,500

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Mar

-14

Jun-

14

Jul-1

4

Aug

-14

Exports Imports

Foreign trade (% change = period / last year’s period)


-4.0-2.00.02.04.06.08.0

10.012.014.016.018.020.022.0

I.201

3 II III

IV V VI

VII

VII

I

IX X XI

2013

I.201

4 II III

IV V VI

VII

VII

I

Exports Imports

Trade balance


-31

-28

-25

-22

-19

-16

-13

-10

-7

-4

-1

2

-3,250

-3,000

-2,750

-2,500

-2,250

-2,000

-1,750

-1,500

-1,250

-1,000

-750

-500

-250

0

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Mar

-14

Jun-

14

Jul-1

4

Aug

-14

in million US$ (left scale)Trade balance as % of GDP (right scale)

Top trading partners (at the end of August 2014, in percent of total)

• Exports 1. Germany = 41.1% 2. Italy = 6.9% 3. Bulgaria = 6.6% 4. Serbia = 5.2% 5. Greece = 5.1% 6. Kosovo = 4.8% 7. Belgium = 3.2%

• Imports 1. UK = 12.8% 2. Germany = 11.0% 3. Greece = 9.5% 4. Serbia = 8.3% 5. Italy = 6.3% 6. China = 5.8% 7. Bulgaria = 5.3%


Trade with the USA (on cumulative basis, in million US$)


0

25

50

75

100

125

150

175

200

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

III.2

014

VI.2

014

VII

.201

4V

III.2

014

Exports Imports

Current account balance

projected


-14

-12

-10

-8

-6

-4

-2

0

-1300-1200-1100-1000-900-800-700-600-500-400-300-200-100

0

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Mar

-14

Jun-

14Ju

l-14

2014

Cummulative (in million US$) as % of GDP

Foreign Direct Investment (in million US$)

2004 323.0 ⇓ 2005 97.0 ⇓ 2006 424.2 ⇓ 2007 699.1 ⇓ 2008 587.0 ⇓ 2009 197.1 ⇓ 2010 211.6 ⇓ 2011 473.5 ⇓ 2012 139.7 ⇓ 2013 334.7

⇓ Jul. 2014 208.4


050

100150200250300350400450500550600650700

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Mar

-14

Jun-

14

Jul-1

4

Foreign exchange reserves (in million US$) Dec.2002 734.5

⇓ Dec.2003 903.4 ⇓ Dec.2004 985.7 ⇓ Dec.2005 1,331.1 ⇓ Dec.2006 1,871.0

⇓ Dec.2007 2,219.2 ⇓ Dec.2008 2,106.2 ⇓ Dec.2009 2,289.8 ⇓ Dec.2010 2,276.9 ⇓ Dec.2011 2,666.6 ⇓ Dec.2012 2,891.4 ⇓ Dec.2013 2,746.9 ⇓ Sep.2014 3,092.7


0200400600800

1,0001,2001,4001,6001,8002,0002,2002,4002,6002,8003,0003,2003,400

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Mar

.14

Jun.

14

Sep.

14

External Debt


25%28%31%34%37%40%43%46%49%52%55%58%61%64%67%70%73%

800

1,800

2,800

3,800

4,800

5,800

6,800

7,800

8,80020

00

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Mar

-14

Jun-

14

in million US$ as % of GDP

Budget revenues and expenditures (in million Denar)


02,0004,0006,0008,000

10,00012,00014,00016,00018,000

I.201

3 II III

IV V VI

VII

VII

I

IX X XI

XII

.201

3

I.201

4 II III

IV V VI

VII

VII

I

Budget revenues Budget expenditures

Budget balance (as % of GDP)

--- projected


-7.0-6.0-5.0-4.0-3.0-2.0-1.00.01.02.03.0

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Mar

.-14

Jun.

-14

Jul.-

14A

ug.-1

420

14

Fiscal performance (August 2014, in million denars)


January - August Index January - August 20142013 2014 2014/2013 % share % of plan

Total Budget revenues 91,903 91,824 99.9 100.0 59.01. Primary revenues 59,436 60,112 101.1 65.5 59.3 A. Tax revenues 51,322 53,568 104.4 58.3 61.8 - personal income tax 6,531 7,547 115.6 8.2 67.4 - profits tax 3,313 3,350 101.1 3.6 66.9 - VAT 25,765 27,793 107.9 30.3 62.5 - excises 10,070 10,653 105.8 11.6 62.9 - import duties 2,789 2,763 99.1 3.0 58.6 B. Non-tax revenues 8,114 6,544 80.7 7.1 44.52. Capital revenues 2,995 1,434 47.9 1.6 34.33. Foreign donations 1,844 1,414 76.7 1.5 31.4Total Budget expenditures 106,648 108,802 102.0 100.0 62.11. Current expenditures 96,043 98,382 102.4 90.4 63.9 - wages, salaries and allowances 15,044 15,265 101.5 14.0 64.7 - goods and services 9,876 9,750 98.7 9.0 52.3 - transfers 68,159 70,153 102.9 64.5 65.3 - interest 2,964 3,214 108.4 3.0 73.02. Capital expenditures 10,605 10,420 98.3 9.6 49.4Financing 14,745 16,978 115.1 86.61. Borrowing from abroad 18,695 35,187 188.2 96.52. Privatization receipts 270 440 163.0 100.03. Domestic borrowing 9,489 5,361 56.5 87.24. Deposits 402 -18,972 - 149.75. Repayment of principal (outflow) 14,364 5,307 36.9 48.9

Public Debt


20222426283032343638404244464850

1,0001,2501,5001,7502,0002,2502,5002,7503,0003,2503,5003,7504,0004,250

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

III.2

014

VI.2

014

VII

.201

4

VII

I.201

4

in million US$ as % of GDP (right scale)

Nominal Weighted Interest Rates


0.02.04.06.08.0

10.012.014.016.018.020.022.0

Dec

.-00

Dec

.-01

Dec

.-02

Dec

.-03

Dec

.-04

Dec

.-05

Dec

.-06

Dec

.-07

Dec

.-08

Dec

.-09

Dec

.-10

Dec

.-11

Dec

.-12

Dec

.-13

Jan.

-14

Feb.

-14

Mar

.-14

Apr

.-14

May

.-14

Jun.

-14

Jul.-

14A

ug.-1

4

lending deposit

Nominal Net Wages (in US$)


400410420430440450460470480490

I.201

3 II III

IV V VI

VII

VII

I

IX X XI

XII

.201

3

I.201

4 II III

IV V VI

VII

Nominal net wage

Unemployment (in percent)

* Source: Labor Force Survey (State Statistical Office)

- 30.4% of the population lived below the poverty line in 2011 - “gray economy” is estimated between 15% and 40% of GDP

0%5%

10%15%20%25%30%35%40%

1992

1993

1994

1995

1996

*19

97*

1998

*19

99*

2000

*20

01*

2002

*20

03*

2004

*20

05*

2006

*20

07*

2008

*20

09*

2010

*20

11*

2012

*20

13*

Q1

2014

*Q

2 20

14*

Challenges • Curb fiscal stimulus and restore fiscal sustainability • Refrain from further easing of monetary policy • Continue structural reforms and improve the business

climate • Respect property rights and enforce the rule of law • Continue reforms in judiciary • Attract more FDI; encourage domestic investments • Continue battle against corruption, improve

governance, reduce “gray economy” • EU and NATO accession

Overview of the Macedonian EconomyImportant eventsDemographyEthnic compositionGross Domestic Product (in %)GDP per capita (in US$)Main components�of GDP in Q2 2014Inflation�(average rate = period / last year’s period)Industrial output�(average rate = period / last year’s period)Industrial output by branches�(% change)Foreign trade�(in million US$) Foreign trade�(% change = period / last year’s period)Trade balanceTop trading partners�(at the end of August 2014, in percent of total)Trade with the USA�(on cumulative basis, in million US$)Current account balanceForeign Direct Investment�(in million US$)Foreign exchange reserves�(in million US$) External DebtBudget revenues and expenditures�(in million Denar)Budget balance�(as % of GDP)Fiscal performance (August 2014, in million denars)Public DebtNominal Weighted Interest RatesNominal Net Wages�(in US$)Unemployment (in percent) Challenges

overview of the macedonian economy...overview of the macedonian economy . u.s. embassy skopje ....

Documents