Socio-Economic Impact Assessment

MACROECONOMIC OUTLOOK

From a macroeconomic perspective, the COVID-19 pandemic will severely affect the circular flow of the national economy. The disruptions will put intense pressure on unemployment and poverty rates and will reverse the pre-crisis development results. Health containment measures, fiscal stimulus and needed structural and institutional interventions can bring the economy back to the pre-crisis path no sooner than end-2023. The pandemic will most likely cause a reduction in the GDP of 4.0%. The unemployment was on a declining path for over a decade and was projected to reach 16.8% this year. However, due to labor layoffs and exceptionally low job creation, it is projected to reach 20.4% by the end of 2020. These trends will inevitably affect the poverty rate, which according to our forecasts, will rise to 21%.

GDP Forecast per Capita

Expected cumulative losses
2.3 billion USD
in 2020 and 2021

Back to normal
not before 2023
under a strong reform scenario

Recession might be
deeper than expected
-5.4% in 2020

Actual and forecasted quarterly real GDP growth

Rapid decline in real GDP in
Q2 2020 of 12.7%

Gradual recovery expected
in Q3 and Q4 2020

Positive growth expected
to resume in Q1 2021

Number of registered unemployed

36.8% increase
since the start
of the pandemic

Worst month so far
is June 2020 with
12,268 new unemployed

Hardest hit are Gevgelija and Valandovo
with 80% increase
in unemployment