Current political situation

After the change of government in 2017 and the signing of the Prespa Agreement, new chapter for development of North Macedonia has began, especially on NATO and EU membership issue. The country become 30^th NATO MS in March 2020, and at the moment we are expecting the final decision of European council regarding opening of negotiation for membership in the EU.  

Unfortunately, failure to get date for start of negotiations in October 2019 directly influenced decision to call early parliamentary elections to be held in April 2020. However, political stability is at a high level and North Macedonia is the only functioning democracy in the Western Balkans, where all parliamentary parties participate in the work of parliament and support EU path. Bearing in mind the serious political developments and the positive reviews from Brussels and other centers of power, North Macedonia accomplished a significant increase not only in economic parameters, but also in political stability and the strengthening of rule of law.

The current composition of the Government of the Republic of North Macedonia was confirmed upon voting by the Assembly on January 16th, 2022, with 62 votes in favour and 46 opposed, after the President of SDUM, Dimitar Kovachevski, was awarded the mandate for a new Government by the President Stevo Pendarovski. 

The mandate for the work of the Government is based on the will of the citizens expressed on the last parliamentary elections which took place on July 15th, 2020, the parliamentary and political support represented by most MPs and the trust for implementation of the politics defined in the Program for work the of the Government in the period 2020-2024, as well as the strategic documents for its implementation adopted in the recent period.

The mandate of the Government is to realize the political determinations as foreseen in the Program for work of the Government 2022-2024.

Current economic situation

The Gross Domestic Product (GDP) in Macedonia was worth 13.20 billion US dollars in 2019, according to official data from the World Bank and projections from Trading Economics. The GDP value of Macedonia represents 0.01 percent of the world economy.[1] Macedonia GDP - values, historical data and charts - was last updated on March of 2020.

Economic growth strengthened in the first half of 2019 to 3.6 percent, its fastest rate since 2016. Wholesale and retail trade were the main driver of growth, accounting for 1.5 pp. Agriculture contributed 0.5 pp contributions, while industry contributed 0.4 pp despite a slowdown in manufacturing, evident in Q2 2019. Construction also added 0.1 pp, but this is expected to be temporary as surveys for the sector point to positive expectations from companies in terms of contracts, prices and employment. On the demand side, the main contributors to growth were investment as well as private consumption, the latter spurred by rising wages, pensions, and household lending. Net exports subtracted from growth, as rising exports did not compensate for the growing imports of capital and consumer goods. 

Table 1 Growth of North Macedonian GDP per year in USA $[2]

Primary interests of the state, based on the EU Strategy for economic development Europe 2020, are development of the economy and increase of economic growth and domestic and foreign investments, as a precondition for job creation and better life of citizens. Such economic development requires a competitive and integrated economy, which facilitates the realization of key economic goals: macroeconomic stability, fast economic growth and new employments, and reform policies and measures in five basic groups: stable macroeconomic and fiscal policies; tax and customs policies; improvement of business climate and competitiveness; fostering of investments; and support to small and medium enterprises. SMEs are the pillar of the country’s economic development providing a share of 60% of the GDP and 75% of all employments.

The economic performance of the Macedonian economy is expressed through stable GDP growth, low inflation rate of < 2 % on average in the past 10 years, fiscal discipline confirmed by the international financial institutions and a well-functioning coordination between fiscal and monetary policy.

Financing Education

Regarding expenditure for education, North Macedonia is steel away from the numbers asked by the OECD, but the new development of the social and political circumstances we will expect increasing numbers for expenditure in education. Education has an important function and is the driver of the development of society. The impact of education and its consequences can be found on the economy, culture, science, technology and the state as a whole. Therefore, each country strives for quality education, and thus for a quality and wellness of individual.

According to the State Statistical Office[3] North Macedonia for education allocated 3.7% of GDP, which is 1.3 percentage points lower than the OECD average of 5.0% of GDP[4].

Table 2 GDP / Education per year[5]

Expenditure per pupil / student

Table 3 Expenditure per pupil / student[6]

The educational attainment level of the adult population in 2018[7]