North Macedonia’s GDP contraction deepens in 1Q21

North Macedonia’s GDP contraction deepens in 1Q21
By bne IntelliNews June 7, 2021

North Macedonia’s economy declined by a real 1.9% y/y in the first quarter of 2021, deepening from a 0.7% contraction in the previous quarter, estimated data released by the Macedonian Statistics Office indicated on June 7.

The contraction coincided with the third wave of coronavirus epidemic in the country, between February and April, which prompted the government to introduce strict restrictions, including shutting down bars and restaurants.

The biggest contraction during the COVID-19 pandemic was registered in the second quarter of 2020, of 12.7%.

GDP totalled MKD162.7bn (€2.6bn) in current prices in the first quarter of the year, up from MKD160.7bn in the same period a year earlier.

The biggest annual decrease was registered in the sector of mining and quarrying, manufacturing as well as utilities, of 6.7%, of which the manufacturing dropped by 6.2%.

The sector of arts, entertainment and recreation declined by 3.8%, followed by public administration sector, by 2.9%, the IT sector, by 0.9% and financial and insurance activities, by 0.7%. Wholesale and retail sector contracted by 0.4%.

Only three sectors registered a growth in the first quarter – the construction sector (1.7%), real estate activities (0.5%) and agriculture and forestry (0.3%).

In the period under review, household final consumption, including non-profit institutions serving households, edged up 0.4%, while general government consumption went down 2.2% y/y. Gross capital formation declined by 16.6% y/y.

In the same period, exports of goods and services went up by 8.6%, while imports of goods and services were 2% higher.

In 2020, the economy contracted by 4.5% following a 3.6% growth in 2019.

The country’s finance ministry projected recently that the economy will grow by 4.1% and 4.6% in 2021 and 2022 respectively and will exceed 5% after 2023.