Macedonia 

Macedonia country policy

Policy established 29 March 2011

• ILC, bank guarantee or central public guarantee (conditional)
• The country ceiling is 1000 mln euro
• Early warning signal 150 mln euro
• - of which was used as at 2012-02-29 23 mln euro

Country class: 5

Macedonia country facts

Atradius Dutch State Business  Economic Research
Country Report last updated :  17 February 2011 
Country :  FYR MACEDONIA

Political Situation

Rather Stable But Ethnic Friction

Head of state
President Georgi Ivanov (VMRO-DPMNE).

Form of government
Coalition of the centre-right VMRO-DPMNE and the Democratic Union for Integration (DUI), headed by prime minister Nikola Gruevski.
 
Internal Economic Situation
Modest Economic Recovery

General situation
After a contraction in 2009 (-0.9) modest economic recovery in 2010 based on still subdued private consumption (weak demand for bank loans, real wage decline) and moderate growth of exports to EU and Balkans. Slow economic transition as evidenced by a moderate business environment, still high corruption (62nd out of 180 on the TI Index), organised crime, large underground economy (1/3 GDP) and a weak legal structure. Liquidation of the largest loss-making state firms caused unemployment rate to rise to >30% officially. After peaking at 10% in 2008H1, inflation has slowed considerably to -0.8% in 2009 and 1.6% in 2010.
 
External Economic Situation
Good Liquidity; Reasonable Solvency

Main sources of foreign exchange
Workers’ remittances, textiles, metal products/steel.

Main foreign markets
EU (56%), Serbia (22%), Croatia (4%).

Main expenses of foreign exchange
Oil, food, spare parts.
 
Balance of payments  
Remittances and other transfers are urgent to cover the very large trade deficits. The inflow of FDI, multilateral finance and ST trade credits have been sufficient to cover the current account deficits so far, underpinning the level of international reserves. High euro-isation financial system.