north macedonia economy

North Macedonia’s economy most vulnerable to external risks in SEE


The economies of North Macedonia and Albania are the most vulnerable to external risks among the countries in Southeast Europe (SEE), Scope Ratings said on Monday.

At the opposite end of the spectrum, Slovenia, Greece and Bulgaria are the most resilient to external shocks among the countries in the region, according to the Berlin-based agency.

“Since 2020, the Covid-19 crisis laid bare underlying external weaknesses of developing and advanced economies, associated with severe supply and demand shocks, supply chain disruption, as well as broad-based stress in bond, FX and commodities markets, revealing latent financial-system vulnerabilities and varying capacities of national governments and central banks to cope in such external conditions. Sovereign credit defaults reached a record last year…The risk of further credit events is high as vulnerable countries face repayment difficulties under testy markets” the annual external vulnerability and resilience rankings report read.

Lebanon, Zambia and Angola rank among economies most at risk under this annual study’s expanded 95-nation country sample in 2021. In addition, countries under a top 10 most at risk globally this year include Georgia, El Salvador, Belarus, Sri Lanka, Argentina, Armenia and Turkey.

These 10 highest-risk economies share characteristics such as high foreign-currency exposure, volatility of currencies (except El Salvador, after adoption of the US dollar as legal tender since 2001), current-account deficits in frequent cases and exposure to severe capital outflow episodes, according to the report.

At the opposite end of the spectrum, Switzerland, Malta and Japan are a “sturdy-3” of most resilient nations. Germany, Belgium, Singapore, Italy, Slovenia and Norway are economies rounding out a top ten of economies least in danger globally to external risk.

Scope’s annual external vulnerability and resilience rankings evaluate economies on 1) underlying vulnerabilities to a potential balance of payment crisis; and 2) economies’ degree of underlying resilience when exposed to such external crisis, with an overall ranking that combines vulnerability to and resilience in crisis.

Scope Group was founded  in 2002 and employs almost 250 people at its locations in Berlin, Frankfurt, Hamburg, London, Milan, Madrid, Oslo and Paris.

The IMF projects North Macedonia’s GDP to grow by 4% in 2021.