Economy of North Macedonia

The economy of North Macedonia has become more liberalized, with an improved business environment, since its independence from Yugoslavia in 1991, which deprived the country of its key protected markets and the large transfer payments from Belgrade. Prior to independence, North Macedonia was Yugoslavia's poorest republic (only 5% of the total federal output of goods and services). An absence of infrastructure, United Nations sanctions on its largest market (the Federal Republic of Yugoslavia), and a Greek economic embargo hindered economic growth until 1996.

Worker remittances and foreign aid have softened the subsequent volatile recovery period. The country's GDP has increased each year except in 2001, rising by 5% in 2000. However, growth in 1999 was held down by the severe regional economic dislocations caused by the Kosovo War.

Successful privatization in 2000 boosted the country's reserves to over $700 million. Also, the leadership demonstrated a continuing commitment to economic reform, free trade, and regional integration. The economy can meet its basic food needs, and its coal and hydroelectric power needs, but depends on outside sources for all of its petroleum, natural gas, and most of its modern machinery and parts. Inflation jumped to 11% in 2000 largely due to higher oil prices, but the currency has calmed since the exchange rate was normalised when the EU Stabilisation and Association Agreement entered into force in 2004.