Northern Macedonia Economics and Business

According to cheeroutdoor, Northern Macedonia, officially known as the Republic of North Macedonia, is a small country located in the Balkan region of southeastern Europe. With an estimated population of 2.1 million and a GDP per capita of US$ 11,102, Northern Macedonia is one of the poorest countries in Europe. The economy is largely service-based and relies heavily on remittances from abroad which account for around 10% of total GDP. Agriculture still plays a significant role in the economy with crops such as wheat, maize, barley and potatoes being the main products grown.

Industrial production accounts for around 20% of total GDP with manufacturing activities such as textiles, furniture and electronics making up the majority. Tourism has become increasingly important in recent years with over 2 million visitors entering the country each year to explore its unique culture and monuments. Additionally, foreign investment has also been on the rise with many international companies setting up operations in Northern Macedonia due to its low labor costs and attractive tax incentives.

In order to improve economic conditions in Northern Macedonia, the government needs to focus on creating more jobs by encouraging foreign investment and entrepreneurship as well as improving infrastructure such as roads, ports and telecommunications networks which are outdated by international standards. Additionally, it needs to reduce its reliance on remittances by diversifying its export markets beyond Europe so that it can increase foreign currency earnings which would enable it to purchase essential imports without relying on other countries’ generosity.

Abbreviated as UEM by, Northern Macedonia’s gross domestic product (GDP) had zero growth in 2017, while in 2015 and 2016 there was an increase of 3.9 and 2.9 percent respectively. In the list of countries’ gross national income (GNP) per capita, Northern Macedonia is in 100th place. Of the former Yugoslav republics, only Kosovo has a lower ranking with 115th place. Unemployment in Northern Macedonia is 22.4 percent, and 21.5 percent of the population lives below the poverty line.

Historical background

According to COUNTRYAAH, Northern Macedonia underwent an economic crisis in the 1980s that threatened the area with a complete collapse. With few inhabitants and a vulnerable geographical location, few believed that the Republic could manage on its own.

North Macedonia GDP (Nominal, $USD) 2003-2017

Following the independence of Northern Macedonia in 1991, Greece introduced full blockade of Northern Macedonia by closing the port of Thessaloniki for Macedonian goods. This blockade lasted until 1995. At the same time, an international blockade of Yugoslavia was launched, a blockade in Northern Macedonia indirectly becoming a victim of. The country was thus hit by blockade on two sides.

In 1995, Greece was pressured by the United States to cooperate with Northern Macedonia, but even after the lifting of the blockade, Northern Macedonia’s economic situation has been very difficult. The privatization process initiated after independence in 1991 did not lead to the expected economic growth.

The conflict with Albanian rebels from February to August 2001 set the country back economically. After 2001, the government implemented tax reforms and established economic zones aimed at increasing foreign investment. Together with other economic reforms and measures to strengthen regional integration, this has led the country from 2004 to have a more positive economic development.


Agriculture contributes 10.9 percent of GDP. Arable land and pasture make up about 25 percent of the country’s total land, but agriculture only employs 16.2 percent of the working population. Animal husbandry, and especially cattle and sheep, is the most important form of farming. Most of the cultivable land is found in the river valleys. Here wheat, sugar beet, maize, cotton, tobacco, vegetables, fruit and grapes are grown. There is considerable irrigation.


The country has relatively rich mineral deposits, and coal is extracted. Otherwise, lead and zinc ore, copper and chromite are recovered. There are also deposits of iron, nickel, manganese, silver and gold that are only partially exploited.


Northern Macedonia covers 83.5 percent of its electricity needs through its own production from coal and water resources. In 1995, a pipeline was opened from the Bulgarian border to transport natural gas from Russia. In 2002, a pipeline was opened to transport oil from the Greek port city of Thessaloniki to Skopje.


The industry contributes 26.6 percent of GDP and employs 29.2 percent of the working population. Major industries are the iron and steel industry, the food, textile and chemical industries. The country also produces footwear, tobacco products, cement, pharmaceuticals and automotive parts.

Transport and Communications

The communication network is generally poorly developed. The road and rail networks along the Vardar Valley have traditionally been important for freight and passenger traffic between Greece and Central Europe. The total rail network is 925 kilometers. The road network is 14 182 kilometers, of which 270 kilometers are highways. There are international airports at Skopje and Ohrid.


The number of foreign tourists increased from 586,000 in 2010 to 1.1 million in 2018.

Note: the capital city of Macedonia is Skopje with a population of 507,000 (estimate 2019). Other major cities include Kumanovo, Bitola, Tetovo.

Foreign Trade

Northern Macedonia exports totaled US $ 4,601 billion in 2017, while imports totaled US $ 6,630 billion. With this, the country had a deficit in the foreign trade balance of just over two billion US dollars.

The four main export markets are:

  • Germany(46.7 percent)
  • Bulgaria(6.1 percent)
  • Serbia(4.4 percent)
  • Belgium(4.1 percent)

The main export products are food and beverages, tobacco, textiles, iron, steel and car parts.

The six main import markets are:

  • Germany (11.9 percent)
  • United Kingdom(10.0 percent)
  • Greece (8.0 percent)
  • Serbia(7.1 percent)
  • China(5.9 percent)
  • Italy(5.5%)

The main import goods are oil, natural gas, machinery and equipment, motor vehicles, chemicals and food products.

Macedonia Economics and Business

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