Macedonia's economy registers 3.7 pct growth in 2015

Macedonia's economy grew by 3.7 percent in 2015, the World Bank (WB) reported in its Southeast Europe report.

The WB expects the country's growth to remain robust at 3.7 percent in 2016 and increase to four percent in 2017. The political uncertainty and refugee crises are the primary risks to the economy over the coming year.

According to the WB report, Macedonia's growth in 2015 was driven by rising private consumption and higher public spending, with net exports making a small contribution. Growth is expected to accelerate gradually in the medium term, but prolonged political turmoil would affect this outlook negatively.

"Prolonged political uncertainties could affect investment decisions and slow economic activity. Escalation of the current refugee crises may also be a risk, especially if the EU decides to close its borders or significantly limit the inflow," the report read.

The World Bank says growth was largely driven by construction, wholesale, and retail trade and services, particularly real estate, fueled by buoyant credit growth. Manufacturing output contracted by 2 percent as the recovery in the second half of 2015, partially compensating for the slowdown earlier in the year. Finally, agriculture production has slowed down, despite receiving increasing subsidizes.

The report also suggests unemployment dropped to an average of 26.1 percent in 2015, from 28.1 percent in 2014. Youth unemployment also eased significantly, from 53.1 percent in 2014 to 47.3 percent in 2015, helped by costly youth employment programs.

In regional terms, the report underlined that a revival of investment underpinned economic growth, particularly private investment -- both foreign and domestic -- while exports are helping to fuel this growth. Enditem