News 01 Feb 13

Macedonia's Output Drops for Entire Year

Industrial output declined in Macedonia for 12 months in a row in 2012, data show, dampening hopes of a quick economic recovery.

Sinisa Jakov Marusic

Photo by: Sinisa Jakov Marusic

Latest data from Macedonia's State Statistical Office show that industrial output in December dropped by 8 per cent compared to the same month in 2011.

Overall, output for 2012 dropped by 6.6 per cent compared to 2011.

Figures show that the flagship metal and construction industries, which represent the core of the economy, have been hard hit.

Mining, on the other hand, saw an increase, as did the country’s sizable textile industry, after significantly shrinking in 2011.

Macedonia has had a tough economic time lately, as exports fall, largely because of the crisis in the eurozone.

After going into recession, with two consecutive quarters of negative growth in 2012, Macedonia exited recession at the end of 2012 and is expected to finish 2013 with annual growth of around zero.

The government is more optimistic. It envisages annual growth of 2 per cent this year as the economy makes a slow recovery.

Economy Minister Valon Saracini anticipates growth in several sectors, “foremost in the construction industry, especially with announced government capital investments in roads, railroads and energy”. He also expects more foreign direct investment, FDI.

This year, like last year, Macedonia has boosted spending on capital investment in order to keep industries going.

In June, parliament also approved taking out a loan of €100 million from the European Investment Bank to spend on health, education and social welfare.

The World Bank in its latest report predicts another difficult year ahead for the whole of Southeast Europe, forecasting only very slow recovery in the region's economies.

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