FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ANNUAL REPORT 2015
MACEDONIA
Country Facts
key CAPITAL MARKETS INFORMATION
Country Macedonia Legal
For profit-joint stock company
Capital Skopje Regulation
Self
Area (km 2 ) 25,713 Securities market regulations Regulatory institutions, SEC and Exchange
Population (million) 2.1 GDP (USD billion) 11.324 Currency Macedonian Denar (MKD)
Exchange rate (1 USD) 50.56
Trading rules Exchange, government institution
Surveillance Yes
Corporate actions Centralized
Time zone CET (UTC+1) Trading halts regulations Yes
Calling code +389 Investor protection Yes
key economıc data
GDP ANNUAL GROWTH (%)
7
INFLATION (%)
7
6
5
4
3
2
1
0
-1
-2
-3
6
5
4
3
2
1
0
-1
04 05 06 07 08 09 10 11 12 13 14* 15 15
Q1* Q2*
PUBLIC DEBT TO GDP (%)
40
35
30
25
20
15
10
5
0
04 05 06 07 08 09 10 11 12 13 14 15 15 15
Q1 Q2 Q3
04 05 06 07 08 09 10 11 12 13 14 15 15
Q1 Q2
* Preliminary data for 2014 and estimated data for 2015
Macroeconomic
performance Major structural reform
developments
The economy has recovered well after the
2012 recession. In contrast to 2012, when GDP
contracted by 0.4% on the back of weak export
growth and reduced private consumption, growth
in 2013 was relatively strong, the GDP rose by
about 3%, owing primarily to public investment,
along with the recovery of exports and private
consumption. However, the more vibrant economy
has not been reflected on the labor market, the
level of unemployment remained high (nearly
30%). These trends have continued into 2014, the
GDP grow by about 3.8% in 2014, along with low
inflation. High-level accession dialogue with the European
Union continues but formal EU accession
negotiations remain stalled. In October 2014 the
European Commission issued a recommendation
to open accession talks with Macedonia for the
sixth year in a row. However, thus far the European
Council has not upheld this recommendation. The
high-level accession dialogue between the EU
and Macedonia, initiated in 2012 and aimed at
maintaining the country’s reform momentum in
five key areas (rule of law, public administration,
freedoms, electoral reform and the economy), is
ongoing.
Fiscal policy has loosened considerably over the
past few years. The budget deficit rose from 2.5%
in 2011 to nearly 4% of GDP in 2012, 4.1% in 2013
and about 4% in 2014. It is expected to remain
elevated in the coming years on account of the
government’s continued high capital expenditures.
Public debt (including guaranteed debt of public
enterprises and state-owned companies), however,
still remains relatively moderate by regional
standards at an estimated 46.8% of GDP at the end
2014. Further enhancements to the business environment
have been made over the past year. In recent
years, Macedonia has consistently out-performed
other countries in the region for its ease of doing
business. The country currently ranks 30th (out of
189 countries) in the World Bank Doing Business
2015 report. Further measures taken in the past
year to ease the burden on enterprises include a
new Law on Financial Discipline, effective May
2014, which aims to improve liquidity in the private
sector.
30
Reform efforts to attract foreign direct investment
are paying off. FDI jumped more than three fold in
2013 relative to the previous year, and was followed
by a 43% year-on-year increase in the 2014. This
reflects the strong pro-FDI policies of the previous
years. The source of FDI is quite diverse, covering
both EU countries as well as partners from the
Middle East, the United States and Turkey, among
others. Macedonia has also become a producer of
car components and there are several investments
in this growing sector.
Transport infrastructure upgrades continue. Two key
road projects have been approved in Macedonia:
the Skopje-Stip highway and the highway from
Kicevo to Ohrid. The value of the two projects is
estimated to be above €0.5 billion.
Financial sector stability has been preserved. The
market is dominated by foreign banks, which
account for over 90% of total banking assets.
However, banks have relied primarily on domestic
deposits to fund lending and less on parent bank
capital (the loan-to-deposit ratio of the private
sector is about 93%), so they were not as affected
by deleveraging pressures during the crisis as their
regional peers. The non-performing loan ratio has
been declining somewhat since mid-2013 (when it
was at its post-crisis maximum of 11.8%) to 10.6%
as of end of 2014.
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