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BRIEFApril 11, 2023

Consultations: North Macedonia Systematic Country Diagnostic Update 2023

North Macedonia SCD Update

The 2023 Systematic Country Diagnostic (SCD) is an update of the 2018 edition, the first SCD produced for North Macedonia.

Online consultations are closed. They were open between April 24–May 4, 2023 via the online survey (survey available in ENG | MKD). 

What is a Systematic Country Diagnostic?

Systematic Country Diagnostic (SCD) is an analytical report produced by the World Bank Group for member countries before the start of the new Country Partnership Framework (CPF) cycle. The aim of the SCD is to identify the most important constrains and opportunities a country faces as it works to end extreme poverty and promote shared prosperity in a sustainable manner. The SCD is based on a thorough analysis and consultations with a wide range of stakeholders.

Systematic Country Diagnostic (2018) for North Macedonia

North Macedonia has come a long way since its independence in 1991. Early market-oriented reforms, openness to trade, and prudent macroeconomic policies fostered a stable environment that attracted private investment and boosted exports, particularly in manufacturing. In two decades, its economic growth was the most stable in the Western Balkans, income per capita doubled, and the country moved from low-middle to upper-middle-income status. Despite all the achievements, economic growth could not help closing the gap in living standards with European countries. To seize the opportunities that EU accession can bring, the country had to act boldly and hold to a steady reform course.

2023 Systematic Country Diagnostic Update for North Macedonia: Main findings, pathways, and timeline 

The 2023 SCD Update suggest that potential growth was slowing even before the pandemic due to low and declining productivity, skills, and demographic changes. And although economic growth continued to benefit the less-well off, poverty remains relatively high, and about one-third of population remains vulnerable to shocks. This is in line with the 2018 SCD findings. An aging population, coupled with outmigration and skills mismatch continues to constrain the much-needed labor force for stronger growth. These challenges are further exacerbated by the economic impacts of the COVID-19 pandemic and ongoing war in Ukraine. 

The SCD argues that improved institutions for better governance, strengthened human capital development and inclusion, improved business environment for creation of more and better paid jobs, as well as strengthened household resilience to natural disasters and ensured environmental sustainability for future generations can bring the country to the high-income status in a generation.

The 2023 SCD Update proposes four pathways to gradually overcome these challenges, build back better from the economic impacts of the prolonged pandemic, ongoing war in Ukraine, and the energy crisis, boost living standards of the citizens especially the most poor and vulnerable, and improve resilience to climate change and natural disasters.  

Timeline of the 2023 SCD Update and what happens next

The process of consultations with counterparts, stakeholders, and citizens is scheduled for April 24-May 4, 2023.  

Once completed, the SCD will inform the next Country Partnership Framework (CPF) between the World Bank Group and North Macedonia and, thus, guide the focus of the World Bank Group support to the country by seeking to maximize high-level outcomes (HLOs) consistent with the country’s development goals. Find out more about the current CPF.

We would like to hear from you!

Online consultations will be open between April 24-May 4, 2023. We welcome inputs from all interested parties – both local and international.