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ECONOMY[/FONT]
Macedonia is a small economy with a gross domestic product (GDP) of about $8 billion, representing about 0.01% of the total world output. It is an open economy, highly integrated into international trade, with a total trade-to-GDP ratio of 106.8%. Agriculture and industry have been the two most important sectors of the economy in the past, but the services sector has gained prominence in recent years. Economic problems persist, even as Macedonia undertakes structural reforms to finish the transition to a market-oriented economy. A largely obsolete industrial infrastructure has not seen much investment during the transition period. Labor force education and skills are competitive in some technical areas and industries but significantly lacking in others. Without adequate job opportunities, many with the best skills seek employment abroad. A low standard of living, high unemployment rate, and relatively modest economic growth rate are the central economic problems.
Five years of continuous economic expansion in Macedonia was interrupted by the 2001 conflict, which led to a contraction of 4.5% in 2001. Growth started to pick up in 2003 (2.8%) and continued in 2004 (4.1%), 2005 (4.1%), 2006 (4.0%), and 2007 (5.1%). Living standards still lag behind those enjoyed before independence. Real growth is projected to reach a rather optimistic 6% annually in 2008, with inflation of up to 5%. The United States is supporting Macedonia's transition to a democratic, secure, market-oriented society with substantial amounts of assistance.
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[/FONT]After the breakup of Yugoslavia in 1991, Macedonia, the former Yugoslavia's poorest republic, faced formidable economic challenges posed by both the transition to a market economy and a difficult regional situation. The breakup deprived Macedonia of key protected markets and large transfer payments from the central Yugoslav government. The war in Bosnia, international sanctions on Serbia, and the 1999 crisis in neighboring Kosovo delivered successive shocks to Macedonia's trade-dependent economy. The government's painful but necessary structural reforms and macroeconomic stabilization program generated additional economic dislocation. Macedonia's economy was hurt especially by a trade embargo imposed by Greece in February 1994 in a dispute over the country's name, flag, and constitution, and by international trade sanctions against Serbia that were not suspended until a month after conclusion of the Dayton Accords. The impact of the 2001 ethnic Albanian insurgency in Macedonia, decreased international demand for Macedonian products, canceled contracts in the textile and iron and steel industry, and poor restructuring of the private sector affected Macedonia's growth and foreign trade prospects through 2004.
Macedonia's political and security situation is stable. This has allowed the government to refocus energies on domestic reforms, boosting economic growth, and attracting increased levels of foreign investment. In 2004, the government passed a progressive Trade Companies Law aimed at easing impediments to foreign investment, providing tax and investment incentives, and guaranteeing shareholder rights. In 2006, the government began implementing a one-stop procedure for business registration that considerably shortened the time required to register a new business. The government's fiscal policy, aligned with International Monetary Fund (IMF) and World Bank policies, helped maintain a stable macroeconomic environment. Legislation that would further liberalize the telecommunications market, and completion of the first phase of privatization of the electricity sector, sent promising signals to investors. However, economic growth remained sub-par in 2005 and 2006, due in part to poor government results in combating corruption and a weak judiciary, as well as high domestic finance costs and continued bureaucratic obstacles to doing business. The new Government of Macedonia that took office in August 2006 put the fight against corruption and attracting foreign investors at the very top of its priority list. In 2007, it launched an expensive marketing campaign promoting the country as a good investment destination. It provided business incentives by cutting rates on profit tax and personal income tax, while implementing a "regulatory guillotine"--an activity which aims to significantly reduce procedures and legislative requirements for doing business.
Macroeconomy
The upward trend of real GDP continued in 2007. After growing by 4.1%, 4.1%, and 4% respectively in 2004, 2005, and 2006, growth in 2007 reached 5.1%. The growth was broad-based as value added increased in all sectors, except in agriculture. Wholesale and retail trade sectors led the growth with a 14% annual increase, and the transport and communications sector followed with 12.5%. Industrial output in 2007 was 3.7% higher than in 2006, but in the first two months of 2008 industrial output grew by 10%. Inflation unexpectedly surpassed projections, with the year-on-year consumer price index (CPI) rising by 6.1%. Growing food and energy prices pushed inflation up to 10.2% in March 2008. The official unemployment rate came down a bit to 34.8% in 2007. Strong collection of revenues throughout 2007 resulted in a budget surplus of 0.3% of GDP, despite the projected deficit of 1% of GDP. Tax collection continued the upward trend in the first quarter of 2008, surpassing last year's first quarter performance by more than 20%. Monetary policy in 2007 provided for credit to the private sector to expand by 29.7%, and interest rates have continued to decline, with interest rates' spreads narrowing. Although export growth topped import growth in 2007, the trade deficit remained high at 23.3% of GDP. In spite of that, the current account deficit remained relatively low at 3.1% of GDP, primarily due to the inflow of large private transfers. External debt was reduced to 34.3% of GDP, due to pre-paying debts to international financial institutions.
In late 2005, Macedonian authorities concluded a new Stand-By Arrangement (SBA) with the IMF and a Programmatic Development Policy Loan (PDPL) with the World Bank. In 2007 both financial institutions positively assessed the enforcement of the programs, allowing the Government of Macedonia to withdraw a tranche of the PDPL 2 agreement worth $30 million. Since the first withdrawal of $12 million in 2006, the SBA has been only precautionary as balance-of-payment support was no longer needed. In February 2008, the IMF Board approved the third positive review of the SBA. In March 2007, the World Bank Board adopted a new four-year Country Partnership Strategy for Macedonia, which could potentially bring to the country total lending of up to $280 million.
извор http://www.traveldocs.com/mk/economy.htm
може ли некој економски поткован да ми пообјасни ова на начин да економски лаик како мене да го разбере??посебно овој болдираниот дел.
