Macedonian Economics Essay

Added on -2020-07-22

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Economics
Table of ContentsINTRODUCTION...........................................................................................................................11. Trading block that country is member of................................................................................12. Globalization effects on the Mecedonia's trade relations........................................................33 The exchange rate and the Macedonia's currency in relation to trade.....................................7REFERENCES................................................................................................................................1Illustration IndexIllustration 1: Macedonia Inflation rate Source: tradingeconomics.com.........................................2Illustration 2: Macedonia Unemployment rate Source: tradingeconomics.com..............................3Illustration 3: GDP of Macedonia ...................................................................................................4Illustration 4: Gross domestic product (GDP) growth rate in Macedonia 2022..............................5Illustration 5: Macedonia Balance of Trade 2015-2018..................................................................5Illustration 6: Macedonia Foreign Direct Investment .....................................................................7
INTRODUCTIONMacedonian economy has been transformed into independent nation as it was earlier indominance of Yugoslavia. The impact can be seen on Macedonia by Yugoslavia is thatbureaucratic costs of economic planning is difficult to allocate on resources in the nation.Moreover, price fixation of goods and services is impacted because of Yugoslavia state.Productivity is reduced as well and as such, over-employment may be seen in the country. State-owned businesses are also minimised and it is again impacting economy quite adversely.Customers needs and wants are not satisfied effectively as more corruption is prevailing which isdamaging overall economy. Moreover, demands and preferences of customers are required to beattained. While, mal-investment is also there and investment is made in wasteful resources.1. Trading block that country is member ofMacedonia is a trading block member of World Trade Organisation (WTO) and EuropeanUnion (EU) and EFTA (European Free Trade Association). The nation has transitioned since itsindependence from Yugoslavia state which had dominance for number of years on the countryquite adversely. Macedonian economy joined WTO since 4 April 2003. Macedonia joined WTOfor the main reason in order to freely trade with the other nations and as such, to enhanceeconomic growth in the best possible manner. Furthermore, this help to increase overall GDP(Gross Domestic Product) of the country in effective way (Sherifi and Turan, 2018). On the other hand, Macedonia joined EU since 2005 for accession purpose. However, itis candidate for enhancement of EU but no accession negotiation has been entered by thecountry. This means that no such negotiations have taken place in the country. On the otherhand, Macedonia joined EFTA agreement on 19 June 2000. The main reason behind thisagreement was to freely trade industrial products and fish and marine goods as well with a periodof ten years. The country is regional trading block member of EU (Boskov and et.al, 2018). Thetransition process of Macedonian economy was good for the nation as before Washingtonconsensus, poor economic growth was prevailing and further, unemployment rate was extremelyhigh. This led to decrease in Macedonian Denar as external value of currency was depreciated uptoo much extent. However, this approach led to monetary stability and effective growth ofMacedonian economy in a better way.1
The macroeconomic indicator of Macedonia is that economy has transformed quiteeffectively as inflation rate has been lowered down in January 2018 as it was more in past years.The main measure of inflation is Consumer Price Index (CPI). It is a rate which measureschanges observed in price of products that are purchased by the households of the nation. It canbe analysed that CPI has maximised up to 1.6 % in the month of March 2018. This means thatinflation has been controlled as households spending are increased which is a good sign ofeconomy (Apostolov and Josheski, 2018). On the other hand, income policy and balancing the budget are another macroeconomicindicators which injected growth of country. However, these indicators often lead to minimiseoutput of the nation and as such, it should be in accordance to the structural reforms. Thisimplies that government initiates change with relation to economic reforms so that nation'sgrowth may be achieved in a balanced way. This is done so that output may be increased and assuch, structured growth can be attained by the country. The theory of second best implies thatfeasibility of two options cannot be effectively satisfied or arrived at conclusion, then usuallysecond solution is taken into account to attain desired outcome (Papadimitriou, 2018). The unemployment rate is also required to be reduced in order to inject growth in the bestpossible manner. It can be interpreted from last two four years that unemployment rate inMacedonia has been reduced which is good for the middle-income country and as such, it was27.3 in 2015, while, it reached to 21.9 in 2018. 2Illustration 1: Macedonia Inflation rate Source: tradingeconomics.com

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