Republic of North Macedonia: Selected Issues

IMF Staff Country Reports, January 27, 2020

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Republic of North Macedonia: Selected Issues

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Bibliographic details

• Published: January 27, 2020
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9781513527932.002

Summary

• This Selected Issues paper focuses on income convergence and integration of North Macedonia with the European Union (EU).
• Joining the EU has the potential to strengthen growth prospects based on the experience of other countries.
• The macroeconomic indicators of North Macedonia appear aligned with other countries at the time they started EU accession negotiations.
• The EU accession process constitutes a fundamental anchor for institutional reform momentum.
• Significant efforts to improve institutional quality in new member states took place in the years prior to EU accession to comply with Copenhagen criteria on:
  • stability of institutions, guaranteeing democracy and the rule of law;
  • the existence of a functioning market economy;
  • the capacity to cope with competitive pressure and market forces within the EU.
• The analysis shows evidence that opening of EU accession negotiations and better quality of institutions, rule of law, and control of corruption can improve growth prospects.

Key Findings

• EU accession can strengthen growth prospects for aspiring countries, including North Macedonia.
• North Macedonia’s macroeconomic indicators are aligned with those of countries at the start of EU accession negotiations.
• Institutional improvements driven by the accession process (including rule of law and control of corruption) are important channels for enhancing growth.

Policy Implications and Recommendations

• Pursue EU accession negotiations as an anchor for sustained institutional reform momentum.
• Prioritize improvements in institutional quality, rule of law, and control of corruption to enhance growth prospects and better position North Macedonia for integration into the EU.
• Ensure compliance with Copenhagen criteria to meet democratic, market economy, and competitiveness requirements ahead of membership.

Content in this bundle

• Republic of North Macedonia: Selected Issues; IMF Country Report No. 20/25; December 27, 2019
  • Republic of North Macedonia: Selected Issues; IMF Country Report No. 20/25; December 27, 2019 (Markdown version)
  • Republic of North Macedonia: Selected Issues; IMF Country Report No. 20/25; December 27, 2019 (PDF)