Macedonia’s Economy Contracts 0.9% in Q1

 

 

Macedonia’s economy contracted by a nominal 0.9% in the first quarter, compared to a 5.6% growth a year earlier, preliminary data of the country’s statistics office showed. According to the official data Macedonia’s GDP totalled EUR 1.46 billion in the first quarter. The sector of mining, manufacturing, electricity, gas and water supply contracted by 7.0%, while agriculture and construction managed to increase by 1.3% and 1.7% respectively. Meanwhile Macedonia’s industrial output fell by 2.4% in May Month-on-Month, after rising by a monthly 1.3% in April. On an annual basis, industrial output fell by 15.3% in May. The biggest drop in industrial production was in capital goods, mining and manufacturing industries.

 

 

 

 

Analysis and forecast ( increasing risk)

 


Weak foreign demand of industrial goods is hitting hard on Macedonia in the last few quarters, as the country is too dependent on ferro-nickel, iron, steel products and clothes exports. So far the country is experiencing a sharp drop in exports, as they fell by 43.5% on the year until May, while imports decreased only by 32.9%. Weak demand from EU trading partners and weak diversification of the exports are pointing towards a further economic activity contraction in Q2. On the financial channel side, foreign direct investment in Macedonia had halved in the first months of the year, lowering capital formation activities which will also contribute to negative growth throughout the year.

 

 

Macedonia wants EU mission to end

 

 

Macedonia’s PM Nikola Gruevski is lobbying in front of European representatives to end the EU mission in Macedonia that was started after the armed conflict in 2001. In the eyes of the government, one more mandate of the mission would create a negative impression of Macedonia as a country, which cannot yet handle its internal problems. This may become problematic since Macedonia is waiting to get a date to start its EU accession talks.

 

 

Analysis and forecast  ( increasing risk)

 

 

After the successful elections and the positive feedback that Macedonia is getting from the EU, the level of self-confidence of its authorities has risen substantially. Most probably,the current Macedonian Government’s wish for the EU mission to end has more to dowith demonstrating stability to the voters rather than being a move of foreign policy.Moreover, the differences of opinion between Gruevski and the leader of the mission inMacedonia, the Irish diplomat Ervan Fuere also support that aspiration. For some time now,Fuere has been criticizing the government regarding its insufficient engagement withthe implementation of the criteria of getting a date for EU accession talks. Additionally, a clear indication of stability has not yet been demonstrated on the part of Macedonia since factors that maintain ethnic tension in the country are still present. Therefore, the aspiration to end the EU mission seems a bit unreasonable at this point. Especially because its continuation does not seem to bias the image of the country regarding the EU accession talks date.

After the successful elections and the positive feedback that Macedonia is getting from
the EU, the level of self-confidence of its authorities has risen substantially. Most probably,
the current Macedonian Government’s wish for the EU mission to end has more to do
with demonstrating stability to the voters rather than being a move of foreign policy.
Moreover, the differences of opinion between Gruevski and the leader of the mission in
Macedonia, the Irish diplomat Ervan Fuere also support that aspiration. For some time now,
Fuere has been criticizing the government regarding its insufficient engagement with
the implementation of the criteria of getting a date for EU accession talks. Additionally,
a clear indication of stability has not yet been demonstrated on the part of Macedonia
since factors that maintain ethnic tension in the country are still present. Therefore,
the aspiration to end the EU mission seems a bit unreasonable at this point. Especially
because its continuation does not seem to bias the image of the country regarding the
EU accession talks date.

After the successful elections and the positive feedback that Macedonia is getting from the EU, the level of self-confidence of its authorities has risen substantially. Most probably, the current Macedonian Government’s wish for the EU mission to end has more to do with demonstrating stability to the voters rather than being a move of foreign policy. Moreover, the differences of opinion between Gruevski and the leader of the mission in Macedonia, the Irish diplomat Ervan Fuere also support that aspiration. For some time now, Fuere has been criticizing the government regarding its insufficient engagement with the implementation of the criteria of getting a date for EU accession talks. Additionally,a clear indication of stability has not yet been demonstrated on the part of Macedonia since factors that maintain ethnic tension in the country are still present. Therefore, the aspiration to end the EU mission seems a bit unreasonable at this point. Especially because its continuation does not seem to bias the image of the country regarding the EU accession talks date.