GDP, current US$ billion
GDP per capita, current US$
School Enrollment, primary (% gross) (2015)
Life Expectancy at Birth, years
FYR Macedonia is an upper-middle-income country that has made great strides in reforming its economy over the past decade. Following strong economic growth during the period 2002–08 averaging 4.3%, average GDP growth has declined to 2.1% per year since 2009. The main drivers of growth since 2009 have been construction (supported by sizable public investments), industry (particularly manufacturing), and wholesale and retail trade.
Although the country has made significant progress in terms of its economic development, efforts are still needed across a range of areas to generate economic growth that will create jobs and improve living standards for all. However, real GDP growth would need to accelerate to around 4.5% for FYR Macedonia’s living standards to converge with those of the new European Union (EU) member states within the next 20 years.
Accession to the EU remains the anchor of the Government’s reform agenda. FYR Macedonia became an EU candidate country in 2005, and since 2009 the European Commission (EC) has recommended opening accession negotiations. However, the decision continues to be postponed, in part due to the dispute with Greece over the country’s name. The EC has an active program of assistance to FYR Macedonia, including Instrument of Pre-Accession (IPA) funding, the largest source of concessional funds in the country.
Economic growth did not translate into significant poverty reduction in FYR Macedonia before 2008, but poverty seems to have declined somewhat in recent years.
As a small, open economy, FYR Macedonia needs to rely on further growth in exports and increased competitiveness to answer its long-term growth challenges. The political situation remains the primary downside risk to the economy in the near term. Prolonged political uncertainties could affect investment decisions and slow economic activity. In addition, the country is facing growing fiscal risks in the rapidly rising public debt. These dynamics could threaten stability and undermine growth prospects in the medium term if not addressed.
Last Updated: Apr 20, 2017