Quarterly Economic Monitor Q2 – 2019

Analysis and publications

Macedonia 2025 projects: GDP growth between 1 – 3% in q2 2019

Based on the available early warning indicators and high frequency data, we project moderate economic slowdown in North Macedonia in the second quarter of 2019.

These projections are based on following economic developments in q2 2019:

Industry: Industrial production grew moderately by only 1.3% in the second quarter of 2019. As can be seen from the chart, this represents significant slowdown compared to the previous quarters. There are two major reasons for this slowdown: Brussels imposed quotas on the metal products exports to EU from North Macedonia, as well as the decline in the car industry in Germany – the biggest North Macedonia trading partner.

Industry will have moderate impact on GDP growth in q2 2019.

Trade: Trade developments on average are strong in q2 2019 with average annual growth rate of 13.9%. This strong trade growth is due to high wholesale growth, while retail and motor vehicle growth rates are declining. Trade developments will have strong positive impact on the GDP growth in q2 2019.

Credit to private sector growth: Strong consumption and trade are continuously fueled by strong credit to private sector growth of 8.4% in q2 2019.

Construction: Completed construction works are showing significant decline in q2 2019. This indirectly implies that investments in q2 2019 will be very weak.

Tourism: Number of tourist in q2 2019 increased only moderately. Compared to the growth in q1 2019 there is some improvement, but the trend is still negative as can be seen from the chart. Contribution of tourism to GDP growth will be positive.

Consumption side:
 The exports and imports growth in q2 2019 is strong, showing that net exports will have positive impact to GDP growth. Consumption of households is contributing positive as well, while public consumption (low capital investments) and private investments will have negative impact.