TRADE PERFORMANCE OF THE REPUBLIC OF NORTH MACEDONIA
Keywords:
Republic of North Macedonia, trade integration, trade strategy, foreign direct investmentsAbstract
Trade integration and participation in global supply chains contributed to the Republic of North
Macedonia acquiring the status of a middle-income country. An effective trade policy can have a positive impact on
economic growth through better access to new markets, integration into global supply chains, promoting reforms
that can improve the business climate, attracting investments and hence increasing the overall productivity of the
national economy. The Republic of North Macedonia has made significant progress in this regard, but the global
pandemic caused by the COVID-19 virus and the war in Ukraine in 2022 have an impact on its trade strategy.
Increased concentration in key export sectors has limited the role of trade in the country's economic growth and
increased the country's dependence on specialized products and markets. Export concentration has been evident over
the past decade, even as the country has attracted export-oriented foreign direct investment, which has diversified
the country's export structure with more sophisticated products than ever before. This trade strategy of the country
has eroded due to the low level of economic transformation of the domestic economy. This situation is also evident
in the recovery phase, where economic growth after COVID-19 was driven mainly by consumption, and to a lesser
extent investments, while net exports did not contribute to recovery growth. The analyzes show that the Republic of
North Macedonia is well integrated in the global trade system in terms of trade in goods, but its progress in the past
decade is small.
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