Republic of North Macedonia: Selected Issues
IMF Staff Country Reports, May 6, 2025
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- Republic of North Macedonia: Selected Issues
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Bibliographic details
- Published: May 6, 2025
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798229010870.002
Summary findings
- The paper examines the expected costs of the population decline on potential output growth in New Macedonia.
- The IMF estimates that the population decline would create a drag on output growth of around 0.5 percentage points.
- Increased emigration, potentially driven by further EU integration, presents a downside risk to the outlook as it could further worsen population dynamics.
- Negative impacts of further EU integration from increased emigration can be offset by increasing productivity.
- The analysis highlights large structural barriers in:
- the productivity of workers,
- the matching efficiency between workers and firms, and
- the cost of creating new vacancies in North Macedonia compared to European countries.
Modeling approach and scenarios
- The paper employs a structural model of the European labor market with migration to study the impact of further EU integration.
- Scenario results indicate that productivity-increasing reforms can offset negative migration-driven impacts on potential output.
Policy recommendations and channels
- Productivity-increasing structural reforms.
- Active labor market policies.
- New business support.
- Labor participation support.
- These policies can bolster the labor market and act as catalysts for economic growth by boosting potential output and helping to offset some of the negative impact of migration.
Content in this bundle
- Republic of North Macedonia: Selected Issues; IMF Country Report No. 25/102; April 8, 2025