Economic Activity.... 14
Slowdown To Intensify In 2012....14
Economic growth exceeded expectations in the first half of 2011, but the early signs of a slowdown are already evident, and we expect
a more subdued expansion in the short term. With the worst of the regional slowdown likely to hit Macedonia in H112, we have revised
down our target for full-year growth in 2012 to 3%, from a previous 3.9%. We have also tempered our medium-term forecasts, as
domestic demand will be unable to compensate for sluggish export growth amid a regional slump.
TABLE: ECONOMIC ACTIVITY.. 14
Moderate Slippage In 2012...16
The parameters used to form the Macedonian record 2012 budget are overly optimistic in our view, and we expect the government to
make amendments to spending plans as revenues fall short of target. Nevertheless, we believe the government will ensure the budget
deficit does not exceed the -3% threshold used in the eurozone, and target a shortfall of -2.9% of GDP that gradually narrows over the
medium term.
TABLE: FISCAL POLICY.... 16
Chapter 3: 10-Year Forecast.. 19
The Macedonian Economy To 2021.... 19
Reform Agenda Will Generate Growth Beyond Recession...19
Macedonias reformist trajectory looks set to generate robust GDP growth through to 2021 amid steady convergence with EU political
and economic standards. Nevertheless, we caution that political uncertainties could yet pose risks to the longer-term outlook.
TABLE: LONG-TERM MACROECONOMIC FORECASTS .... 19
Chapter 4: Business Environment. 21
SWOT Analysis .... 21
Business Environment Risk Ratings .....21
Business Environment Outlook.. 22
Introduction ..22
Institutions ....22
TABLE: BMI BUSINESS AND OPERATION RISK RATINGS... 22
TABLE: BMI LEGAL FRAMEWORK RATING... 23
Infrastructure ....24
TABLE: LABOUR FORCE QUA LIT Y..... 25
Market Orientation ....26
TABLE: EMERGING EUROPE – ANNUA L FDI INFLOWS.... 26
TABLE: TRADE AND INVESTMENT RATINGS..... 27
TABLE: TOP EXPORT DESTINATIONS .... 27
Chapter 5: BMI Global Assumptions. 29
Global Outlook.. 29
Eurozone Break-Up Risks Rising ...29
TABLE: GLOBAL ASSUMPTIONS ..... 29
TABLE: DEVELOPE D STATES REAL GDP GROWTH FORECAST .... 30
TABLE: REAL GDP GROWTH CONSENSUS FORECASTS .... 30
TABLE: EMERGING MARKETS REAL GDP GROWTH FORECAST ... 31