Economy of Macedonia

The economy of Macedonia is considered to be an intermediary-developed industry, with continuing growth of the industrial production. The major industries of Macedonia are food processing, chemicals, iron, beverages, textiles, steel, cement, energy and pharmaceuticals. Even after the breakup of Yugoslavia in 1991 shaking the economy of Macedonia, the country has come a long way in improving its condition.

In 1995 the process of transition in the economy was triggered with the government making arrangements with the International Monetary Fund (IMF) and the World Bank. Macedonia's economy is an open economy integrating into international trade, with a total trade-to-Gross Domestic Product (GDP) ratio of 79.5%, the most important sectors being the agriculture and industry. But in the last five years several service sectors have also come up.

Through its economic policy Macedonia is also trying to attract foreign investments and to increase employment. In 1996 the absence of infrastructure, United Nations sanctions on its largest market Federal Republic of Yugoslavia, and a Greek economic embargo hindered economic growth of the country. The current policy also sees to the development of small and medium-sized enterprise sector coupled with the stabilization of the currency for a long period.

The subsequent volatile recovery period have been softened a lot by the worker remittances and foreign aid. Each year the GDP has increased except in 2001, rising by 5% in 2000. However, due to the severe regional economic dislocations caused by the Kosovo war the growth in 1999 was held down. In 2000 Successful privatization boosted the country's reserves to over $700 million. The leadership also demonstrated a continuing commitment to economic reform, free trade, and regional integration. Macedonian economy can now meet its basic food needs but depends on outside sources for all of its oil, gas and most of its modern machinery and parts. Due to higher oil prices in 2000, the inflation jumped to 11%.

Nevertheless, in 2001 due to the ethnic Albanian insurgency, the leadership's commitment to economic reform, free trade, and regional integration was undermined. The Macedonian economy shrank 4.5% because of intermittent border closures, decreased trade, increased deficit spending on security needs, and investor uncertainty. Still in 2002 the growth rate recovered to 0.9%, and then averaged 4% per year during 2003-06. Facts on Macedonian economy show that though Macedonia has maintained its macroeconomic stability with low inflation, it has still lagged the region in attracting foreign investment, and job growth has been anemic.

• GDP (purchasing power parity): $16.91 billion (2006 est.)

•GDP (official exchange rate): $6.225 billion (2006 est.)

•GDP - real growth rate: 3.2% (2006 est.)

•GDP - per capita (PPP): $8,200 (2006 est.)

•GDP - composition by sector : agriculture: 9%
                                                   industry: 29%
                                                   services: 62% (2006 est.)

•Labor force: 899,000 (2006 est.)

•Investment (gross fixed): 9.2% of GDP (2006 est.)

•Public debt: 41.5% of GDP (2006 est.)

•Industrial production growth rate: 3.4% (2006 est.)

•Exports: $2.341 billion f.o.b. (2006 est.)

•Imports: $3.631 billion f.o.b. (2006 est.)

•Reserves of foreign exchange and gold: $1.867 billion (November 2006)

•Debt - external: $2.285 billion (November 2006)

•Fiscal year: calendar year


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