Economy of Macedonia

By | April 29, 2022

Until 1945, Macedonia was an underdeveloped agricultural region, where handicrafts and trade were mainly present. Only 1% of the population was employed at 127 industrial enterprises. During the 2nd World War, almost all industry, most of the handicraft and trade were destroyed. After the war, under the new government, the accelerated industrialization of the country began. Between 1960 and 1987, the social product tripled, industrial production nearly nine times, and handicraft output 2.2 times.

At present, agriculture provides approx. 13.2% of GDP and almost completely satisfies the needs of the population in food. The land is mostly in small private ownership: 68% of households have less than 2 hectares of agricultural land.

According to cheeroutdoor, modern forms of agriculture are used where land irrigation is possible during dry summers. Macedonia has favorable conditions for growing cotton, high quality tobacco, poppies and vegetables. OK. 20% of arable land is sown with wheat. Forests occupy 35.2% of all land, mainly in mountainous areas.

The water resources of the rivers favor the construction of hydroelectric power plants. The country generates 4.7 billion kWh of electricity per year. In Macedonia, 5.6 million coal is mined in the Oslomei mines near the city of Kichevo and in the Bitola region.

Among the most developed industries is metalworking. In Skopje, industrial, construction and agricultural equipment, buses and car bodies are produced, in Ohrid – auto parts and machine tools, in Kocani – parts for cars and tractors, in Veles – metalworking machines, in Stipe – agricultural machinery and household metal products. Electrical goods are produced in Skopje (transformers), Ohrid (insulation materials), Prilep (electric motors), Bitola (refrigerators) and Gevgelija (electric ceramics).

The chemical industry is developing on the basis of domestic raw materials in the cities of Skopje, Ohrid, Strig, Kumanovo and Tetovo. An oil refinery with a capacity of 2.5 million tons of oil per year was built near Skopje. There are enterprises of the textile and clothing industry, the food and tobacco industries are developing on the basis of local raw materials, a large porcelain and sanitary ceramics factory operates in Veles, and cement and glass factories in Skopje. The construction industry accounts for approx. 5% of GDP.

Macedonia has approx. 5,000 km of paved roads, the most important of which is the motorway from the Serbian border to the Greek border via Skopje. International airports have been built in Skopje and near Lake Ohrid. Tourism is developed mainly on the shores of the Ohrid, Prespan, Doyran and Mavrovsky lakes, winter tourism is on Shar-mountain (Popova Shapka), health resorts and hydropathic centers work all year round.

Like all other transition countries, Macedonia experienced a significant decline in social production, which dragged on until 1995. The recovery of economic activity that followed in the next three years was again suspended in 1999 due to the negative impact on the Macedonian economy of the armed conflict over Kosovo, which led to the influx of numerous Albanian refugees. After a successful economic year of 2000, when the GDP grew by 4.5%, in 2001, due to the armed interethnic conflict, the GDP again decreased by 4.1%. The country’s economy could not recover from the onset of a deep crisis in the next year. The economic and social problems accompanying the economic development of Macedonia during the years of its independence have become aggravated.

In April 1992, the country introduced its own currency, the dinar, later pegged to the German mark. The strengthening of the dinar took place in parallel with the fight against inflation, which accelerated after the liberalization of prices. Thanks to the tight monetary policy of the People’s Bank, it was possible to reduce the annual inflation rate to less than 5%. Financial stabilization was also expressed in overcoming the deficit of the state budget, which in 1999 was balanced, and in 2000 had a surplus of 2.6% of GDP. The country’s tax system is adapted to the requirements of a market economy, although it carries a significant social burden.

A serious problem in Macedonia is unemployment, which, according to various estimates, is 30-40% of the able-bodied population.

The country carried out the privatization of industrial and commercial enterprises, as well as banks. On horseback 2001 there were 21 commercial banks and 17 savings institutions. In 6 banks, including the two largest, foreign capital prevails.

Economy of Macedonia