High Growth Rate Buoys Macedonia

Macedonia was cheered by the latest data by the State Statistical Office, which show GDP grew in the second quarter of 2011 by a buoyant 5.3 per cent.

In the first quarter this year Macedonia's GDP rose by 5.1 per cent.

The growth rate is significantly higher than even the biggest optimists predicted for this year.

The World Bank forecast some 3 per cent growth for Macedonia and the government itself predicted that it could achieve 3.5 per cent.

In the second quarter, as in the first, the biggest increase - 26 per cent - was marked in the country’s flagship construction industry compared to the same quarter last year.

The rise is mainly down to the increased engagement of local construction companies in a government project to rebuild the capital called "Skopje 2014".

The wholesale and retail trade, repair of motor vehicles, motorcycles and of  personal and household goods rose by 18 per cent in the second quarter.

Mining and quarrying, manufacturing and electricity as well as the gas and water supply increased by 12.8 per cent.

In the same period, exports of goods and services increased by 25 per cent in nominal terms, while imports rose by 15.6 per cent.

The country last year struggled to maintain minimal positive economic growth. Macedonia spent the first half of 2010 in recession reaching minus 0.9 per cent.

Some experts are skeptical about the unexpectedly high growth figures, saying that the results are based on temporary projects like “Skopje 2014” that won’t provide steady growth in the long run.

“This is a temporary boost mainly influenced by government’s spending. Only fresh factories and greenfield investments can ensure a stable input of money and growth in the future,” Skopje University professor Vanco Uzunov said.

The latest figures resemble the period immediately before the global economic crisis, when Macedonia steady development that peaked in 2008 with an annual growth rate of over 5 per cent.

But the country's export oriented sectors, such as the metal, textile and construction industries suffered badly the following year, resulting in 2009's negative growth of about 1 per cent.