Market Research Logo

Macedonia Country Risk Report Q4 2017

Macedonia Country Risk Report Q4 2017

Core Views

Macedonia's government will remain in a vulnerable position overthe coming years, counting only on a thin parliamentary majority,with its policy-making burdened by ethnic issues and an obstructivepublic opposition.

Unresolved ethnic and geopolitical tensions persist.


Executive Summary
Core Views
Key Risks
Chapter 1: Economic Outlook
SWOT Analysis
BMI Economic Risk Index
Economic Growth Outlook
Economy Gaining Momentum Despite Unstable Government
The Macedonian economy will gain momentum over the coming years, with its real GDP set to expand by 2.7% in 2017 and 3.0% in
2018. A stronger rebound however will continue to be prevented by the unstable political environment weighing on investor confidence
and delaying much needed economic reforms.
GDP By Expenditure Outlook
TABLE: GDP GROWTH FORECASTS
TABLE: PRIVATE CONSUMPTION FORECASTS
TABLE: GOVERNMENT CONSUMPTION FORECASTS
TABLE: FIXED INVESTMENT FORECASTS
TABLE: NET EXPORTS FORECASTS
External Trade And Investment Outlook
Currency Peg A Major Source Of External Stability
Macedonia's currency peg to the euro and exposure to German industrial demand will bolster the external position over the coming
years. A favourable operational environment also means that the country can rely on direct investment as a more stable source of
external funding.
Outlook On External Position
TABLE: CAPITAL & FINANCIAL ACCOUNT BALANCE
TABLE: TOP 5 GOODS EXPORTS IN 2015
TABLE: TOP 5 GOODS IMPORTS IN 2015
TABLE: CURRENT ACCOUNT BALANCE FORECASTS
Fiscal Policy And Public Debt Outlook
Fiscal Policy On A Sustainable Trajectory
EU convergence efforts will keep Macedonian fiscal policy on a sustainable path, with robust economic growth leading to a gradual
decline in total public debt as a share of GDP, with a nominal fiscal deficit of just under 3% of GDP over our forecast period.
Structural Fiscal Position
TABLE: FISCAL POLICY
TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES (2015)
Chapter 2: 10-Year Forecast
The Macedonian Economy To 2026
Robust Growth Will Moderate Over The Next 10 Years
Structural reforms and a competitive manufacturing export sector will continue to drive robust real GDP growth in Macedonia over the
coming decade, which will be further supported by a strengthening household sector. However, heightened political uncertainty and
shifting demographic trends will restrict potential GDP growth and result in a deceleration by the end of our forecast period.
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Chapter 3: Political Outlook
SWOT Analysis
BMI Political Risk Index
Domestic Politics
Government To Remain In A Precarious Position
Macedonia's government will remain in a vulnerable position over the coming years, counting only on a thin parliamentary majority, with
its policy-making burdened by ethnic issues and an obstructive public opposition. In this precarious domestic context, the government
will seek to secure international support, focusing on reviving its chances of EU and NATO membership, though unresolved bilateral
issues and the status of its democratic system will continue to provide headwinds to this goal.
Long-Term Political Outlook
Unresolved Name Dispute And Ethnic Tensions Pose Long-Term Risks
Delays to Macedonia's EU accession process, continuous legislative deadlock, and lingering ethnic tensions remain major challenges to
the county's long-term stability. Moreover, we note that a deteriorating demographic picture could pose severe economic challenges and
exacerbate ethnic tensions as Macedonian society grows more heterogeneous over the coming decades. A lot will depend on whether
the government will remain committed to economic and political integration with Europe, which has already driven much of the country's
reform progress in recent years.
Chapter 4: Operational Risk
Operational Risk
TABLE: SOUTH EAST EUROPE – LABOUR MARKET RISK
TABLE: SOUTH EAST EUROPE – LOGISTICS RISK
TABLE: SOUTH EAST EUROPE – CRIME AND SECURITY RISK
TABLE: SOUTH EAST EUROPE – TRADE AND INVESTMENT RISK
TABLE: ALBANIA, MACEDONIA, MONTENEGRO – TOP 5 EXPORT PRODUCTS, (USDMN), 2015
Chapter 5: BMI Global Macro Outlook
As Good As It Gets?
TABLE: GLOBAL MACROECONOMIC FORECASTS
TABLE: DEVELOPED STATES – REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS – REAL GDP GROWTH, % y-o-y
TABLE: MACEDONIA – MACROECONOMIC DATA & FORECASTS

Download our eBook: How to Succeed Using Market Research

Learn how to effectively navigate the market research process to help guide your organization on the journey to success.

Download eBook

Share this report