2013 Index of Economic Freedom

Macedonia

overall score68.2
world rank43
Rule of Law

Property Rights35.0

Freedom From Corruption39.0

Limited Government

Government Spending69.1

Fiscal Freedom91.4

Regulatory Efficiency

Business Freedom80.3

Labor Freedom78.4

Monetary Freedom84.0

Open Markets

Trade Freedom84.6

Investment Freedom60.0

Financial Freedom60.0

Embed This Data

Create a Comparison Chart

See how Macedonia compares to another country using any of the measures in the Index.

vs
Close
Download PDF
Quick Facts
  • Population:
    • 2.1 million
  • GDP (PPP):
    • $21.3 billion
    • 3.0% growth
    • 3.0% 5-year compound annual growth
    • $10,367 per capita
  • Unemployment:
    • 31.4%
  • Inflation (CPI):
    • 3.9%
  • FDI Inflow:
    • $421.9 million
Embed This Data

Macedonia’s economic freedom score is 68.2, making its economy the 43rd freest in the 2013 Index. Its overall score has decreased by 0.3 point from last year, with modest declines in monetary freedom, freedom from corruption, and labor freedom outweighing small improvements in the control of government spending and trade freedom. Macedonia is ranked 21st out of 43 countries in the Europe region, and its overall score is above the world and regional averages.

Macedonia’s transition to a more open and flexible economic system has been facilitated by substantial restructuring measures over the past decade. While maintaining macroeconomic stability, it has made considerable progress in income growth and poverty reduction. Competitive flat tax rates and a permissive trade regime, supported by a relatively efficient regulatory framework, have encouraged the development of a growing entrepreneurial sector.

Implementation of deeper institutional reforms is critical to strengthening the foundations of economic freedom and inducing more dynamic long-term economic expansion. Systemic weaknesses persist in the protection of property rights and enforcement of anti-corruption measures. The judicial system is weak, undercut by lingering corruption, and vulnerable to political influence.

Close

Background

The Republic of Macedonia gained its independence from the former Yugoslavia in 1991 and has achieved a considerable degree of political and economic stability in recent years. The Social Democrats called for early parliamentary elections in June 2011, and Prime Minister Nikola Gruevski maintained control of his seat in a coalition with the Democratic Union for Integration. Macedonia has fulfilled NATO’s Membership Action Plan, but Greece has unilaterally blocked its accession to the alliance because of a dispute between the two countries over Macedonia’s constitutional name. This dispute is expected to delay Macedonia’s accession to the European Union as well.

Rule of LawView Methodology

Property Rights 35.0 Create a Graph using this measurement

Freedom From Corruption 39.0 Create a Graph using this measurement

Protection of property rights is weak, and the judiciary is opaque and subject to executive influence. In 2011, the government legalized many properties that had been built without construction permits. Relatively weak respect for the rule of law and uncertainties in registering real property and obtaining land titles continue to undermine economic freedom. Corruption remains a cause for concern.

Limited GovernmentView Methodology

The individual income and corporate tax rates are a flat 10 percent. Other taxes include a value-added tax (VAT) and a property transfer tax. Overall tax revenue is equivalent to 25.7 percent of total domestic income. Government spending equals 32.1 percent of total domestic output. The government has run a relatively small budget deficit. Public debt remains under 30 percent of GDP.

Regulatory EfficiencyView Methodology

Launching a business takes only two days and two procedures, and no minimum capital is required. However, licensing can take more than 100 days and cost over five times the level of average annual income. After years of high unemployment and underemployment, recent labor market reforms have focused on easing restrictions on work hours. Monetary stability has been relatively well maintained.

Open MarketsView Methodology

The trade-weighted average tariff rate is 2.7 percent. Some tariff rates were reduced in 2011, but non-tariff barriers include non-transparent import standards and customs corruption. Despite reforms in the investment regime, bureaucratic implementation of regulations deters dynamic growth in new investment. The financial sector has strengthened in recent years, with the government’s role limited primarily to regulatory enforcement.

Country's Score Over Time

Bar Graph of Macedonia Economic Freedom Scores Over a Time Period

Country Comparisons

Bar Graphs comparing Macedonia to other economic country groups

Regional Ranking

rank country overall change
1Switzerland81-0.1
2Denmark76.1-0.1
3Ireland75.7-1.2
4Estonia75.32.1
5United Kingdom74.80.7
6Luxembourg74.2-0.3
7Finland741.7
8The Netherlands73.50.2
9Sweden72.91.2
10Germany72.81.8
11Georgia72.22.8
12Lithuania72.10.6
13Iceland72.11.2
14Austria71.81.5
15Czech Republic70.91.0
16Norway70.51.7
17Armenia69.40.6
18Belgium69.20.2
19Cyprus69-2.8
20Slovakia68.71.7
21Macedonia68.2-0.3
22Spain68-1.1
23Malta67.50.5
24Hungary 67.30.2
25Latvia66.51.3
26Poland661.8
27Albania65.20.1
28Romania65.10.7
29Bulgaria650.3
30France64.10.9
31Portugal63.10.1
32Turkey62.90.4
33Montenegro62.60.1
34Slovenia61.7-1.2
35Croatia61.30.4
36Italy60.61.8
37Serbia 58.60.6
38Bosnia and Herzegovina57.30.0
39Moldova55.51.1
40Greece55.40.0
41Russia51.10.6
42Belarus48-1.0
43Ukraine46.30.2
See Entire Region List ›

View all countries ›

Back to Top