Business Monitor International


Macedonia Business Forecast Report

Published 24 September 2014

  • 41 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,195.00
Macedonia Business Forecast Report

Core Views

  • The exclusion of the main opposition Social Democratic Alliance from Macedonia's policy-making process spells trouble for the political risk profile down the line. Should the status quo be upheld for a prolonged period of time, this would hurt the legitimacy of the ongoing reform process and jeopardise Macedonia's EU membership ambitions.

  • Political and external headwinds will see economic growth in Macedonia gradually decelerate in 2014 and 2015, keeping forecasts well below consensus. However, improvement in domestic conditions will see a return of positive fixed investment growth and steady household consumption growth over the coming years, ensuring a continued recovery of the economy as a whole.

  • A more expansionary fiscal policy this year and next in Macedonia will not derail the broader trend of the deficit narrowing over the coming years. However, the adoption of a revised budget in September means a higher fiscal deficit than we previously assumed in 2014.

Major Forecast Changes

  • We have raised our 2014 real GDP growth forecast from 2.5% to 2.7% and have lowered our 2015 growth forecast from 2.8% to 2.5%.

  • We have lowered our goods exports growth forecast for 2014 from 9.0% to 6.0%, informing our expectations of a sharper widening of the trade deficit to 22.0% of GDP this year (from 20.7% previously).

  • The implementation of budget changes in September has seen us change our fiscal deficit forecast from 3.8% of GDP to 4.4% in 2014.

Key Risks To Outlook

  • Given the strong Q114 GDP print and indications that exports to Germany continued to rise in Q2, despite the economic contraction recorded there, our 2014 real GDP growth forecast of 2.7% may still undershoot, particularly as fixed investment pushed back into positive growth during the first quarter.

  • With ethnic tensions rising, coalition cooperation could once again break down between the ruling VMRO-DPMNE and the ethnic Albanian Democratic Union for Integration (DUI), forcing...

Table of Contents

Executive Summary
5
Core Views
5
Major Forecast Changes
5
Key Risks To Outlook
5
Chapter 1: Political Outlook
7
SWOT Analysis
7
BMI Political Risk Ratings
7
Domestic Politics
8
Opposition Walkout Bodes Ill For Political Stability
8
TABLE: POLITICAL OVERVIEW
8
Long-Term Political Outlook
10
Unresolved Name Dispute And Ethnic Tensions Pose Long-Term Risks
10
Chapter 2: Economic Outlook
13
SWOT Analysis
13
BMI Economic Risk Ratings
13
Economic Activity
14
Economic Recovery Will Underwhelm Amid Lingering Headwinds
14
TABLE: Real GDP Growth Forecasts
14
TABLE: GDP By Expenditure
15
Balance Of Payments
17
Current Account Deficit Narrowing To Continue As Private Transfers Rise
17
TABLE: Current Account
17
Fiscal Policy
19
Fiscal Consolidation To Remain On Track
19
TABLE: Fiscal Policy
19
Regional Monetary Policy
21
ECB Easing: Signs Of Growing Anxiety
21
Chapter 3: 10-Year Forecast
25
The Macedonian Economy To 2023
25
Pursuit Of Continued Reforms Will Support Steady Return To Growth
25
TABLE: Long-Term Macroeconomic Forecasts
25
Chapter 4: Business Environment
29
SWOT Analysis
29
BMI Business Environment Risk Ratings
29
Business Environment Outlook
30
TABLE: BMI BUSINES AND OPERATION RISK RATINGS
30
TABLE: BMI LEGAL FRAMEWORK RATING
31
Infrastructure
32
TABLE: LABOUR FORCE QUALITY
32
TABLE: EMERGING EUROPE - ANNUAL FDI INFLOWS
33
TABLE: TRADE AND INVESTMENT RATINGS
34
Market Orientation
35
TABLE: TOP EXPORT DESTINATIONS
35
Operational Risk
36
Chapter 5: BMI Global Assumptions
37
Global Outlook
37
Eurozone Downgrade On Poor Q214
37
Table: Global Assumptions
37
Table : Developed States , Real GDP Growth, %
38
Table : BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
38
Table : Emerging Markets , Real GDP Growth , %
39

The Macedonia Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Macedonia and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market..

An influential new analysis of Macedonia's economic, political and financial prospects through end-2017, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

  • Forecast the pace and stability of Macedonia's economic and industry growth through end-2017.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise Macedonia's country risks against regional peers using BMI's country comparative Risk Ratings system.
  • Evaluate external threats to doing business in Macedonia, including currency volatility, the commodity price boom and protectionist policies.

The Macedonia Business Forecast Report by Business Monitor International (BMI) includes three major sections: Economic Outlook, Political Outlook and Business Environment.

Economic Outlook:

How will the Macedonian economic policy-making and performance impact on corporate profitability over 2013-2017?

BMI provides our fully independent 5-year forecasts for Macedonia through end-2017 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Macedonia Business Forecast Report features BMI's forecasts with supporting analysis for 2013 through to end-2017, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

  • Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
  • BMI's comprehensive Risk Ratings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

  • Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
  • Balance of Payments - trade and investment, current and capital account.
  • Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
  • Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
  • Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
  • Foreign Direct Investment - approvals, inflows and climate.
  • External Debt - debt profile (short and long-term plus public and private sector exposure).
  • Global Assumptions - forecasts for each year to end-2017 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

  • Rely upon BMI's 100% independent forecast scenarios for Macedonia and underlying assumptions - we take no advertising and are privately-owned.
  • Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on Macedonia, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
  • Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.

Political Outlook:

What are the political risks to doing business in Macedonia over the next 5-years?

BMI's Macedonia country Risk Ratings evaluate the short- and medium-term threats to political stability.

Political Outlook Contents

  • SWOT Analysis for the Macedonian Market - Political Strengths, Weaknesses, Opportunities and Threats facing Macedonia.
  • Political Stability and Risk Assessment - BMI's Risk Ratings assess explicit short- and long-term risks to political stability; latest ratings, rankings and trends for Macedonia's risk are compared with regional and global averages.
  • Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.

Key Benefits

  • Benchmark Macedonia's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
  • Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
  • Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.

Business Environment

Business Environment Risk Ratings with SWOT Analysis - Business environment Risk Ratings for Macedonia, benchmarked against ratings for regional neighbours.

Country Competitiveness - Competitiveness of Macedonia's business operating environment in supporting corporate growth and profitability, compared with regional neighbours.

Business Environment Contents

  • Domestic Environment - Transparency, cronyism and corruption; labour market flexibility; corporate tax burden; interest rate levels; sophistication of banking sector and stock market; levels of business confidence; infrastructure and IT.
  • Foreign Direct Investment - Analysis of foreign investment regime; foreign ownership laws; attractiveness of business environment to foreign investors.
  • Foreign Trade - Analysis of trading environment, government trade policy, liberalisation measures, tariffs and membership of trade areas.

Key Benefits

  • Assess your company's evolving exposure to country specific operational and business risks, using BMI's in-depth analysis of the legal and regulatory business environment.
  • Understand your market's comparative strengths and weaknesses in the key areas of commercial infrastructure and business institutions, using BMI's proprietary global Business Environment Risk Ratings.

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Testimonials

The sections that I find most interesting and useful are the macroeconomic data and forecasts for the country, top export destinations and economic activity. The indicators/analysis of these areas helps us orient our thinking, our assumptions and, consequently, our decisions in the commercial area.

Country Manager, DHL Express