Republic of Macedonia with a small population of 2 million approximately was the weakest republic of the former Yugoslav Federation in terms of economic strength. Macedonia obtained independence on September 8, 1991.
Economic Statistics
Total GDP as measured by purchasing power parity stood at $14.5 billion USD (2004) with corresponding GDP/Capita at $7,100 USD. GDP growth rates include year 2005 at 3.8 percent, 2006 estimated at 3.7 percent and to increase up to 4.5 percent annually towards the end of the decade. Other GDP growth figures include years 2000-01 at negative 4.5 percent growth (contraction), year 2002 at positive 0.9 percent, 2003 at 3.4 percent and year 2004 at 1.3 percent. Inflation has year 2005 projected at 1.2 percent, year 2006 at 1.8 percent with inflation to modestly increase from there up to the 2 percent level. Current account deficit is large at 9.4 percent of GDP for 2004 although 2005 is expected to modestly decline to 7.9 percent. The country’s trade position is in a large deficit position at $1 billion USD (2004) with the current account shortfall better at $311 million USD (2004). The fiscal deficit is modest at 0.8 percent of GDP. Public debt is at 20 percent of GDP. Macedonia’s foreign exchange reserves including gold for 2004 at $928 million USD. Unemployment is high at 37 percent.
CURRENCY: ISO Symbol ‘MKD’, Macedonian denar. At time of review on October 4, 2005, the Macedonian denar had an exchange valuation of 51.31 MKD to the US-dollar (USD) and/or 61.25 to the Euroland euro (EUR). As measured by purchasing power parity, the denar was approximately 30 percent undervalued to the USD in year 2004. Denar pegged to a basked of currencies, exchange rate peg.
CURRENCY HISTORY: the Macedonian denar came into circulation in April 1992. By 1993, currency reform came about whereby one New denar was now equal to 100 Old denar. Historical exchange quotes for the denar include: year 2004 at 49.4 MKD to the USD, year 2003 at 54.3, 2002 at 64.3, 2001 at 68, year 2000 at 65.9, July 1997 at 31, September 1996 at 40.5, December 1995 at 38.8, November 1994 at 39 and October 1992 at 865 (old denar).
CURRENCY FORECAST: looming short-term concerns include the impact of higher energy price increases as Macedonia is a net oil importer as the country still runs a very large trade deficit. With continued IMF financial support and remittances from Macedonians working abroad, new trade opportunities with neighbouring countries coupled with the potential for further development of its agricultural and mineral/metal resources (ie. coal mining) provides for its much needed long-term foreign exchange income for currency support. However, the short-term will see Macedonia’s relatively weak economy as an underlying risk to the fundamental soundness of the denar. Overall currency stability will also be dictated by Macedonia’s ambition to maintain peace & unity to the country. For a further detailed subjective currency opinion on the Macedonian denar, please click the banner below and email BankINTRO.com with your request. Thank you.
Updated: October 4, 2005
