Macedonia’s current account gap narrows 72% y/y in January-August

By bne IntelliNews November 2, 2015

Macedonia's current account gap narrowed 71.5% y/y to €31.5mn in January-August thanks to a robust growth in exports coupled with soft imports, preliminary central bank data showed. The eight-month deficit is equal to 0.4% of the projected 2015 GDP and is well covered by foreign direct investments (FDI) at 1.7% of GDP.

Large foreign investments in manufacturing have helped boost Macedonia's exports. Presently, two of the top three exported goods (catalysts and wiring sets) are produced by foreign investment capacities. Export growth must have also been helped by the weak euro, to which Macedonia is pegging its denar currency.

Macedonia's merchandise trade deficit shrank 5.9% y/y to €1.16bn in January-August, as exports climbed 11.1% y/y to €1.94bn and imports rose 4.1% y/y to €3.1bn. The services surplus widened 17.7% y/y to €268.8mn.

Furthermore, the secondary income surplus edged up 0.4% y/y to €1.01bn. On the other hand, the primary income deficit expanded 36% y/y to €147mn.

In August alone, the current account posted a surplus of €34.1mn, down from €75.4mn in August 2014, reflecting smaller services and secondary income surpluses, as well as a larger primary income deficit.

For the 12 months to end-August, the current account surplus was €10.4mn, or 0.1% of GDP.

Current account, €mn        
  2014   2015  
  Aug Jan-Aug Aug Jan-Aug
CURRENТ ACCOUNT 75 -111 34 -32
- Credit 530 3,746 513 3,996
- Debit 454 3,857 479 4,027
Goods and services  -65 -1,007 -98 -893
- Credit 354 2,584 346 2,847
- Debit 419 3,591 444 3,740
Goods  -136 -1,236 -132 -1,162
- Credit 219 1,746 229 1,941
- Debit 355 2,982 361 3,103
Services  71 228 33 269
- Credit 135 838 117 906
- Debit 64 609 83 637
Primary Income -16 -108 -18 -147
Secondary Income  157 1,005 151 1,009
Source: Central bank        
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