North Macedonia

map North Macedonia
GDP growth exceeded expectations in Q1, reaching 2.1% year on year. However, it is uncertain whether the good news will continue: that growth was driven primarily by a decline in imports, which was a consequence of a significant drop in gross investment and which is unlikely to persist. Inflation has started to slow, following the government’s reinstatement of price caps on a number of staple foodstuffs, but it remains in double figures. Despite inflation cooling, the central bank has continued to hike its interest rate without offering any clear indication of whether the tightening cycle could end soon. Inflows of foreign direct investment (FDI) in Q1 were 7% lower than the year before (in nominal terms), suggesting that the previous year’s strong FDI performance may only have been temporary. However, remittances are growing robustly, with secondary income in the balance of payments rising by 45% in Q1 (nominally), potentially supplying a positive impetus to consumption, despite declining real wages. Given this mixed picture, our forecasts remain largely unchanged: we expect GDP to expand by 1.6% in 2023 and inflation to average 9%. We acknowledge, though, that the risks to the outlook for GDP growth are primarily on the upside. All is quiet on the EU front, as the constitutional changes required for accession talks to get under way seem as distant as ever.
Main Economic Indicators202020212022202320242025
Population, 1000 persons207318371832...
GDP, real change in %-
GDP per capita (EUR at PPP)113501367014730...
Gross industrial production, real change in %-9.51.5-0.3...
Unemployment rate - LFS, in %, average16.415.714.413.012.512.0
Average gross monthly wages, EUR658696773...
Consumer prices, % p.a.
Fiscal balance in % of GDP-8.2-5.4-4.5-3.0-2.5-2.5
Public debt in % of GDP50.852.050.9...
Current account in % of GDP-2.9-3.1-6.0-4.0-3.5-3.5
FDI inflow, EUR m28575803...
Gross external debt in % of GDP78.781.984.2...

Basic data are continuously updated.

* Forecasts are changed beginning of January, April, July and November.
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Monthly Report No. 7-8/2023

Vasily Astrov, Alexandra Bykova, Rumen Dobrinsky, Selena Duraković, Meryem Gökten, Richard Grieveson, Doris Hanzl-Weiss, Gabor Hunya, Branimir Jovanović, Niko Korpar, Sebastian Leitner, Isilda Mara, Olga Pindyuk, Sandor Richter, Bernd Christoph Ströhm, Maryna Tverdostup, Nina Vujanović, Zuzana Zavarská and Adam Żurawski
wiiw Monthly Report No. 7-8, July-August 2023
51 pages including 3 Tables, 24 Figures and 1 Box



Executive summary

Olga Pindyuk
in: Sailing Through Rough Waters
wiiw Forecast Report No. Spring 2023, April 2023 , pp. I-VI