Macedonia Economy 2008

Economy - overview:
At independence in September 1991, Macedonia was the least developed of the Yugoslav republics, producing a mere 5% of the total federal output of goods and services. The collapse of Yugoslavia ended transfer payments from the central government and eliminated advantages from inclusion in a de facto free trade area. An absence of infrastructure, UN sanctions on the downsized Yugoslavia, and a Greek economic embargo over a dispute about the country's constitutional name and flag hindered economic growth until 1996. GDP subsequently rose each year through 2000. However, the leadership's commitment to economic reform, free trade, and regional integration was undermined by the ethnic Albanian insurgency of 2001. The economy shrank 4.5% because of decreased trade, intermittent border closures, increased deficit spending on security needs, and investor uncertainty. Growth barely recovered in 2002 to 0.9%, then averaged 4% per year during 2003-07. Macedonia has maintained macroeconomic stability with low inflation, but it has so far lagged the region in attracting foreign investment and job creation despite making extensive fiscal and business sector reforms. Official unemployment remains the highest in Europe at 35%, but may be somewhat overstated based on the existence of an extensive gray market, estimated to be more than 20 percent of GDP, that falls outside official statistics.

GDP (purchasing power parity):
$17.26 billion
note: Macedonia has a large informal sector (2007 est.)

GDP (official exchange rate):
$6.85 billion (2007 est.)

GDP - real growth rate:
4.6% (2007 est.)

GDP - per capita (PPP):
$8,400 (2007 est.)

GDP - composition by sector:
agriculture: 12.1%
industry: 28.6%
services: 59.3% (2007 est.)

Labor force:
890,000 (2007 est.)

Labor force - by occupation:
agriculture: 21.7%
industry: 32.6%
services: 45.7% (September 2006)

Unemployment rate:
35% (2007 est.)

Population below poverty line:
30% (2005)

Household income or consumption by percentage share:
lowest 10%: 2.4%
highest 10%: 29.6% (2003)

Distribution of family income - Gini index:
39 (2003)

Inflation rate (consumer prices):
2% (2007 est.)

Investment (gross fixed):
18% of GDP (2007 est.)

Budget:
revenues: $2.381 billion
expenditures: $2.456 billion (2007 est.)

Public debt:
26.1% of GDP (2007 est.)

Agriculture - products:
grapes, wine, tobacco, vegetables; milk, eggs

Industries:
food processing, beverages, textiles, chemicals, iron, steel, cement, energy, pharmaceuticals

Industrial production growth rate:
1.6% (2007 est.)

Electricity - production:
5.935 billion kWh (2006)

Electricity - consumption:
8.929 billion kWh (2006)

Electricity - exports:
0 kWh (2006)

Electricity - imports:
2.994 billion kWh (2006)

Oil - production:
0 bbl/day (2005)

Oil - consumption:
20,000 bbl/day (2005 est.)

Oil - exports:
4,134 bbl/day (2004)

Oil - imports:
23,150 bbl/day (2004)

Oil - proved reserves:
0 bbl (1 January 2006 est.)

natural gas - production:
0 cu m (2005 est.)

natural gas - consumption:
95.91 million cu m (2005 est.)

natural gas - exports:
0 cu m (2005 est.)

natural gas - imports:
95.91 million cu m (2005)

natural gas - proved reserves:
0 cu m (1 January 2006 est.)

Current account balance:
$5 million (2007 est.)

Exports:
$2.844 billion f.o.b. (2007 est.)

Exports - commodities:
food, beverages, tobacco; textiles, miscellaneous manufactures, iron and steel

Exports - partners:
Serbia and Montenegro 23.2%, Germany 15.6%, Greece 15.1%, Italy 9.9%, Bulgaria 5.4%, Croatia 5.2% (2006)

Imports:
$4.079 billion f.o.b. (2007 est.)

Imports - partners:
Russia 15.1%, Germany 9.8%, Greece 8.5%, Serbia and Montenegro 7.5%, Bulgaria 6.7%, Italy 6% (2006)

Economic aid - recipient:
$230.3 million (2005)

Reserves of foreign exchange and gold:
$1.803 billion (31 December 2007 est.)

Debt - external:
$2.561 billion (31 December 2007 est.)

Stock of direct foreign investment - at home:
$NA

Stock of direct foreign investment - abroad:
$NA

Market value of publicly traded shares:
$646 million (2005)

Currency (code):
Macedonian denar (MKD)

Exchange rates:
Macedonian denars per US dollar - 45.174 (2007), 48.978 (2006), 48.92 (2005), 49.41 (2004), 54.322 (2003)