The Macedonian economy slowed down to a real 0.1% y/y growth in the first quarter of 2018, after rising by 1.2% y/y in the previous quarter, estimated data released by the Macedonian Statistical Office indicated on June 6.
The growth was slim mainly due to the extremely poor performance of the construction sector, which was one of the main drivers of the economy until 2017.
Gross domestic product (GDP) totaled MKD149.5bn (€2.4bn) in current prices in the first quarter of the year.
According to the statistics office, the largest increase was recorded in the sector of recreation and culture (+12.1%), followed by wholesale and retail sector (+10.5%), professional, scientific and technical activities (+8.5%) and agriculture, forestry and fishing sector (+6.6%) in Q1. The manufacturing sector rose by 5.5% y/y in Q1.
In the first quarter of 2018, the construction sector registered the biggest fall, of 37.2% y/y. Four other sectors also dropped y/y in Q1: IT sector (-6.9%), public administration (-1.6%), financial and insurance (-0.8%) and real estate (-0.2%).
In Q1, household final consumption, including non-profit institutions serving households, increased by 2.3%, while general government consumption fell 1.4% y/y. Gross capital formation dropped by 9% y/y.
In the same period, exports of goods and services increased by 10.6%, while imports of goods and services were 5.1% higher.
A few days ago the World Bank significantly lowered its GDP projection for Macedonia for 2018 by 0.9 pp to 2.3%. Macedonia posted flat GDP growth in 2017, which was a result mainly of effects of the prolonged political crisis after ending 2016 with a growth of 2.9%. The economy only started to recover in the final quarter of 2017.