Macedonia during its independence in 1991 September was the least developed of the Yugoslav republics. Absence of proper infrastructure, collapse of Yugoslavia, Greek economic embargo and UN sanctions collectively retarded economic growth and development of Macedonia. After a turbulent economic phase till 2003, the economy expanded at a growth rate of 5.1% in 2007. Though Macedonia has been economically stable, it has remained unsuccessful in attracting foreign direct investments. Even, extensive tax benefits and business reforms have not proved successful in attracting overseas investments. High unemployment and existence of a substantial gray market are characteristics of Macedonia’s economy.
Economic activities of Macedonia
Tertiary or services sector comprising banking, telecommunications, real estate, and transportation contributing almost 60% of GDP is the largest revenue earning and employment generating sector. The services sector provides employment to almost 50% of the total employed labor force in Macedonia.
The manufacturing or industrial sector accounts for more than 28% of GDP, and engages over 30% of total occupied labor force. Textiles, iron and steel, power generation, cement, chemicals and pharmaceuticals are the important manufacturing industries of Macedonia.
The primary or agricultural sector contributes almost 12% towards Macedonia’s GDP. Nearly 20% of he occupied labor force is employed in this sector. Vegetables, fruits, grapes, and tobacco are the main agricultural products. Milk and its products, and poultry are the other primary activities. Food processing and wine making are key agriculture based industries.
Among the commodities exported, wine, food items, textiles, tobacco, and iron and steel are prominent. The imports include automobiles, machineries and equipments, food products, fuels, and chemicals. Serbia and Montenegro, Greece, Turkey, Russia, Germany, Italy, Belgium, Spain, Serbia, Bulgaria, Slovenia and Croatia are the predominant trading partners of Macedonia.
Important economic parameters of Macedonia
The important economic determinants of Macedonia include:
- GDP based on purchasing power parity (ppp) – US $17.35 billion
- GDP based on official exchange rate – US $ 7.497 billion
- Per capita GDP (ppp) – US $8,400
- Real growth rate of GDP – 5.1%
- Gross fixed investment – 17.7% of GDP
- Total revenue – US $2.508 billion
- Total expenditure – US $2.487 billion
- Export earning – US $3.35 million f.o.b. (free on board)
- Import expenditure – US $ 4.977 billion f.o.b. (free on board)
- Electricity consumption – 8.651 billion kWh
- Oil consumption – 21,700 bbl (billion barrels) per day
- Currency - Macedonian denar, represented as MKD
All figures are based on findings of year 2007.