North Macedonia

map North Macedonia
The economy just cannot seem to begin to recover from the pandemic. GDP in Q1 2021 was 1.9% down year on year – the fourth consecutive quarter of decline. It also fell compared to the previous quarter – by 0.6%, seasonally adjusted. Household consumption was inhibited by the severe pandemic wave and grew just 0.4% year on year, despite a surge in remittances (+18%) and the relatively good labour market. Gross capital formation dropped by 17% year on year, despite the strong inflows of foreign direct investment (12% of GDP). The government failed to step in, and the budget deficit in Q1 ended up as 4% of GDP – short of the 4.9% that had been announced. Especially weak was the execution of capital expenditures, which fell 34% below plan.

We have maintained the growth projection for 2021 unchanged at 4.1%, as the government has adopted a new budget that envisages capital spending 27% higher than previously announced. Household consumption and business investment are also expected to revive from Q2 onward, due to the moderation of the pandemic. The risks are to the downside, with the main two being the weak execution of the government budget and a probable new wave of COVID-19 in autumn. Higher energy and food prices have increased inflation, bringing it to 3% in May (year on year). We have thus upgraded the inflation forecast for 2021 to 2.5%.
Main Economic Indicators201820192020202120222023
Population, 1000 persons207620772075...
GDP, real change in %2.93.2-
GDP per capita (EUR at PPP)113401185011350...
Gross industrial production, real change in %5.43.7-9.6...
Unemployment rate - LFS, in %, average20.717.316.416.015.515.0
Average gross monthly wages, EUR579609658...
Consumer prices, % p.a.
Fiscal balance in % of GDP-1.1-2.2-8.2-5.0-3.5-2.5
Public debt in % of GDP40.440.651.2...
Current account in % of GDP-0.1-3.3-3.5-3.3-3.7-3.7
FDI inflow, EUR m53948874...
Gross external debt in % of GDP73.072.780.2...

Basic data are continuously updated.

* Forecasts are changed beginning of April, July and November.
See Press Conferences.


Monthly Report No. 7-8/2021

Vasily Astrov, Alexandra Bykova, Rumen Dobrinsky, Selena Duraković, Richard Grieveson, Doris Hanzl-Weiss, Gabor Hunya, Branimir Jovanovic, Niko Korpar, Sebastian Leitner, Isilda Mara, Olga Pindyuk, Leon Podkaminer, Sandor Richter, Bernd Christoph Ströhm and Maryna Tverdostup
wiiw Monthly Report No. 7-8, July-August 2021
42 pages including 4 Tables and 15 Figures




Branimir Jovanovic
in: Darkest before the dawn?
wiiw Forecast Report No. Spring 2021, April 2021 , pp. 102-105
Details and Buy