World Bank urges Macedonia to use its potential to accelerate economic growth

World Bank urges Macedonia to use its potential to accelerate economic growth
FYR Macedonia’s economic outcomes are affected by political events
By bne IntelliNews December 1, 2018

EU-aspiring Macedonia has the potential to accelerate its economic growth and reduce poverty if it leverages the advantages of its strategic location and openness to trade and investment to achieve EU standards, the World Bank said in a new report. 

Macedonia is in the process of implementing the name deal with Greece, according to which the country will be renamed North Macedonia, a move that is expected to speed up the country's Nato and EU integration process. If Macedonia implements the deal and other needed reforms it can expect to be invited to start EU accession talks next year.

In early November, the European Commission significantly lowered its forecast for Macedonia’s 2018 GDP growth to 2.1% from 3.1%, due to the possibility of political uncertainty. The government expect a growth of 2.8% in 2018.

The country should also address a series of challenges and carefully to manage risks, the World Bank said in its latest Systematic Country Diagnostic (SCD) report for the country released on November 29.

According to Linda Van Gelder, World Bank regional director for the Western Balkans, increasing the productivity of the economy, enhancing job opportunities and achieving fiscal, social, and environmental sustainability would allow Macedonia to maximise the benefits from EU integration and close the income gap with Europe, with more and better-paid jobs for its citizens.

The SCD identified three pathways for Macedonia to leverage new opportunities to help the country overcome challenges.

These include fostering a more dynamic and competitive private sector, investing in people to build a competitive labour force and achieving economic, social, and environmental sustainability through effective governance, fiscal prudence, and enhanced environmental management.

The report also identified ten priority areas for reforms, with strengthening the rule of law, endowing all people with relevant skills, and improving the ability of local firms to compete globally being on the top of the list.