Macedonia Country Risk Report

Providing comprehensive data and in-depth analysis of political, financial and economic risk.

Report includes: BMI's Core Views, 10-year Forecasts, BMI's Economic Risk Index, Political Stability and Risk Index, Long-term Political Outlook, Operational Risk Index, SWOT Analysis and Structural Economic Sections

Why you should buy this report

  • Understand and measure the political, business environment and operational risks to your company
  • Gain insight on emerging trends that could support, strengthen or disrupt your activities in the market
  • Benefit from 10-year macroeconomic forecasts and insight into the structural characteristics of the economy
  • Get the long-term political outlook and explore possible scenarios for change
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Macedonia Country Risk Report
Product Price
$1,195.00

Core Views

  • 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).

Key Risks

  • 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.

Macroeconomic Forecasts (Macedonia 2013-2016)
Indicator 2013 2014 2015f 2016f
National Sources/BMI
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
Executive Summary
5
Core Views
5
Major Forecast Changes
5
Key Risks To Outlook
5
Chapter 1: Political Outlook
7
SWOT Analysis
7
BMI Political Risk Index
7
Domestic Politics
8
High Risk Of Renewed Instability Despite Breakthrough Deal
8
TABLE: POLITICAL OVERVIEW
8
TABLE: A Chro nolog y Of Macedo nia 's Political Cri sis
9
Long-Term Political Outlook
10
Unresolved Name Dispute And Ethnic Tensions Pose Long-Term Risks
10
Chapter 2: Economic Outlook
13
SWOT Analysis
13
BMI Economic Risk Index
13
Economic Activity I
14
Robust Economy Will Benefit From Increased Domestic Stability
14
TABLE: Real GDP Growt h Foreca sts, %
14
Economic Activity II
15
GDP By Expenditure Outlook
15
TABLE: Private Consumptio n Foreca sts
15
Fiscal Policy I
16
Expansionary Fiscal Policy Will See Public Debt Rise
16
TABLE: Government Consumption Forecasts
16
TABLE: Fixed Investment Forecasts
16
TABLE: Net Exports Forecasts
16
TABLE: Fiscal Forecasts
17
TABLE: Public Debt Forecasts
17
Fiscal Policy II
18
Fiscal & Debt Profile
18
TABLE: Public Debt Forecasts
18
Balance Of Payments I
19
Strong Export Performance Will Keep C/A Deficit In Check
19
TABLE: Curre nt Accou nt Foreca sts
19
Balance Of Payments II
20
Outlook On External Position
20
TABLE: Top 5 Goods Exports In 2014
21
TABLE: Top 5 Goods Imports In 2014
21
TABLE: Capital And Financial Account
22
Chapter 3: 10-Year Forecast
23
The Macedonian Economy To 2024
23
Pursuit Of Continued Reforms Will Support Steady Return To Growth
23
TABLE: Long-Term Macroeconomic Forecasts
23
Chapter 4: Operational Risk
25
SWOT Analysis
25
Operational Risk Index
25
Operational Risk
26
TABLE: South East Europe - Labour Market Risk
26
TABLE: South East Europe - Logistics Risk
29
TABLE: South East Europe - Crime And Security Risk
30
TABLE: South East Europe - Trade And Investment Risk
31
tABLE: Main Import Product s, 2012
32
Chapter 5: BMI Global Macro Outlook
41
Global Macro Outlook
41
China Crisis To Have Far-Reaching Impact
41
Table : Global Assumptions
41
Table : Developed States, Real GDP Growth , %
42
Table : BMI VERSUS BLOOMBERG CONSENS US REAL GDP GROWTH FORECASTS, %
42
Table : Emerging Markets, Real GDP Growth, %
43

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.

Key Uses

  • 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.

The Macedonia Country Risk Report by BMI Research includes three major sections: Economic Outlook, Political Outlook and Operational Risk.

Economic Outlook:

How will the Macedonia' economic policy-making and performance impact on corporate profitability over 2015-2019?

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:

Data:

  • 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.

Written Analysis:

  • 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.

Key Benefits

  • 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.

Political Outlook:

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.

Key Benefits

  • 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.

Operational Risk

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).