North Macedonia posts deep GDP contraction of 12.7% in 2Q20

North Macedonia posts deep GDP contraction of 12.7% in 2Q20
By bne IntelliNews September 7, 2020

North Macedonia posted a deep GDP contraction of a real 12.7% y/y in the second quarter of 2020, following a slim 0.2% y/y growth in the previous quarter, estimated data released by the Macedonian Statistics Office indicated on September 7.

The contraction was expected due to the full impact of the coronavirus (COVID-19) pandemic on the country’s economy. The central bank expects the economy to contract by 3.5% in 2020, while the European Commission projects that the country's economy will drop by 3.9%.

GDP totalled MKD149.8bn (€2.4bn) in current prices in the second quarter of the year, down from MKD169.4bn in the same period a year earlier.

According to the statistics office, the largest annual decrease in the second quarter was recorded in the group of manufacturing, of 29.4%, followed by the wholesale and retail sector by 23.4%.

Financial and insurance activities sector dropped 3.1%, while construction ticked down 0.5% in the second quarter.

Agriculture and forestry posted the biggest increase of 4.5% y/y in the second quarter followed by the public administration, defense, education and human health sector (+2.2%).

IT sector rose 0.9% y/y in the second quarter, while real estate activities were flat.

In the period under review, household final consumption, including non-profit institutions serving households, dropped by 11.6%, while general government consumption went up 1.5% y/y. Gross capital formation plummeted 25.6% y/y.

In the same period, exports of goods and services went down by 31.3%, while imports of goods and services were 29.6% lower.

In 2019, North Macedonia's GDP expanded 3.6%, up from 2.7% in 2018.