Political risk in Macedonia will remain high, particularly as the country's institutional commitment to EU convergence and ambitions for formal membership will be tested by the handover of power from the prime minister to a technocratic government in January, ahead of an early election in April.
A competitive business environment, strengthening domestic demand conditions and robust external demand for Macedonia's manufactured goods will see the economy remain a regional outperformer.
A robust export sector and low energy prices will see Macedonia run a considerably smaller current account deficit over the coming years than in previous years.
Major Forecast Changes
We have lowered our real GDP growth forecasts for Macedonia to 3.2% and 2.8% in 2015 and 2016 respectively, from 3.5% growth for both years.
Major revisions to official primary income data, along with a stronger-than-expected export performance in the first nine months of 2015, have seen us revise our 2015 and 2016 current account deficit forecasts to 0.1% of GDP (from 1.2% and 1.1% respectively).
Political risk will remain high on the agenda as tensions between political parties threaten to escalate despite a deal that will see Prime Minister Nikola Gruevski make way for a technocratic government in January ahead of early elections scheduled for April 26 next year.
A bleak economic growth outlook for Greece threatens to undermine Macedonia's external position, given its high reliance on private sector transfers from vocational labour across the border, which has kept the current account deficit in check.
A sharp economic slowdown in China risks hurting Macedonia's external sector, as Germany's economy could take a hit from weaker demand for its exports.
|Real GDP growth, % y-o-y||2.7||3.8||3.2||2.8|
|Nominal GDP, USDbn||10.7||11.3||9.6||9.6|
|Consumer price inflation, % y-o-y, eop||1.4||-0.6||-0.3||0.8|
|Exchange rate MKD/USD, eop||44.57||50.83||58.57||55.91|
|Budget balance, % of GDP||-3.9||-4.2||-3.8||-3.6|
|Current account balance, % of GDP||-1.6||-0.8||-0.1||-0.1|
The Macedonia Country Risk Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Macedonia. It is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.
An influential new analysis of Macedonia's economic, political and financial prospects through end-2019, just published by award-winning forecasters, BMI Research.
- Forecast the pace and stability of Macedonia's economic and industry growth through end-2019.
- Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
- Assess the critical shortcomings of the operating environment that pose hidden barriers and costs to corporate profitability.
- Contextualise Macedonia's country risks against regional peers using BMI's country comparative Risk Index system.
- Evaluate external threats to doing business in Macedonia, including currency volatility, the commodity price boom and protectionist policies.
BMI provides our fully independent 5-year forecasts for Macedonia through end-2019 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.
Economic Outlook Contents
The Macedonia Country Risk Report features BMI's forecasts with supporting analysis for 2015 through to end-2019, set against government views and BMI's evaluation of global and regional prospects.
Key Areas Covered:
- Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
- BMI's comprehensive Risk Index system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.
- Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
- Balance of Payments - trade and investment, current and capital account.
- Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
- Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
- Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
- Foreign Direct Investment - approvals, inflows and climate.
- External Debt - debt profile (short and long-term plus public and private sector obligations).
- Global Assumptions - forecasts for each year to end-2019 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.
- Rely upon BMI's 100% independent forecast scenarios for Macedonia and underlying assumptions - we take no advertising and are privately-owned.
- Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on Macedonia, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
- Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.
What are the political risks to doing business in Macedonia over the next 5-years?
BMI's Macedonia country Risk Index evaluates the short- and medium-term threats to political stability.
Political Outlook Contents
- SWOT Analysis for the Macedonia Market - Political Strengths, Weaknesses, Opportunities and Threats facing Macedonia.
- Political Stability and Risk Assessment - BMI's Risk Index assesses explicit short- and long-term risks to political stability; latest positioning and trends for Macedonia's risk are compared with regional and global averages.
- Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.
- Long-Term Political Outlook BMI examines the structural risks to the stability of Macedonia’s political system and the dominant public policy issues likely to affect decision-makers, and outlines scenarios for how the state could evolve in the medium to long term.
- Benchmark Macedonia's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
- Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
- Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.
What are the current operational risks and difficulties associated with doing business in Macedonia?
The Operational Risk section gives an evaluation of current risks and difficulties associated with operating in the market. It also provides a brief overview of the regional Operational Risk Index which benchmarks Macedonia against its neighbours.
Operational Risk Contents
The chapter provides a summary of the main threats in the country, within:
- Labour Market Risk (Education; Availability of Labour; and Labour Costs)
- Logistics Risk (Market Size and Utilities; Quality and Extent of the Transport Governance)
- Trade and Investment Risk (Economic Openness; Government Intervention; and Legal Risks)
- Crime and Security Risk (Crime; Terrorism; and Interstate Conflict risks).