North Macedonia Program Updates

Over the past several years Macedonia has introduced a number of economic reforms that have improved the country’s standing in global economic rankings. However, these reforms have not improved key economic indicators such as growth, jobs, and income, due to the frequency of the changes and the lack of consultative processes. Prior to the Eurozone financial crisis, GDP growth in Macedonia was half of its Balkan neighbors. In 2016, weak economic policy and political crisis contributed to a GDP growth rate of 2.4 percent, weak domestic consumption remains weak as incomes stagnate. While the unemployment rate fell to 23.1 percent, most new jobs are created with government subsidies. Entrepreneurship and workforce skills are not keeping pace with the evolving market which further inhibits growth. Although Macedonia is attracting foreign investments to its Technological and Industrial Development Zones, the overall investment level outside these zones remains low and private sector lending is not meeting demand.