Macedonia - Economy





Although the poorest of the six former Yugoslav republics, Macedonia nevertheless can sustain itself in food and energy needs using its own agricultural and coal resources. Due to the scarcity of arable land in the Vardar River Valley and other valleys in the west, expatriate employment in Serbia and Germany has become more common.

In August 1992, because it resented the use of "Macedonia" as the republic's name and feared a hidden ambition to lay claim to the Greek province with the same name, Greece imposed a partial blockade on Macedonia. Greece later imposed a full trade embargo against Macedonia in February 1994. This blockade, combined with the UN sanctions on Serbia and Montenegro, cost the economy an estimated $2 billion by the end of 1994. Macedonia's per capita GNP fell from $1,800 to less than $760 because of the sanctions and the Greek blockade. After threats of legal action by the EU, in October 1995 Greece ceased the embargo and promised not to interfere with Macedonia's commerce.

From 1998 to 2000 real GDP growth averaged a little over 4%, but in 2001, in the wake of rising global tensions and a global economic slowdown, real GDP growth fell 4.5%. Although 2002 saw an end to the contraction, growth was estimated at 0.3%. Inflation had jumped to 6.1% in 200, but moderated to 3.7% in 2001, and was projected at only 1% in 2002. Unemployment remains a serious problem. The official estimate for 2002 was almost 32%,with some 70% of 15-24 year olds without work. In 2001,agriculture accounted for about 10% of GDP; industry, 32%; and services, 58%.

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