Since independence in 1991, Macedonia has made progress in liberalizing its economy and improving the business environment. Low tax rates and free economic zones helped attract foreign investment, which is still not high compared to the rest of Europe.
Macedonia focuses on its foreign policy goal of European and Euro-Atlantic integration. Full participation in the EU single market is a key priority when it comes to international and regional economic agreements. Although the country has made some progress in this regard, integration has been complicated since 2009 due to a dispute with Greece regarding the name of the country. The Stabilization and Association Agreement (SAA) between Macedonia and the EU entered into force in April 2004. The objectives of this agreement, among other things, were to promote the development of economic relations and gradually develop free trade between Macedonia and the EU. In December 2005, the European Council granted Macedonia the status of a candidate country for membership in the EU. In October 2009, the Commission recommended that the Council begin negotiations with Macedonia for the first time and moved to the second phase of the implementation of the SAA agreement. These recommendations were repeated every year since 2010. Since the two countries recently signed a dispute on the name of a country with a very strict timetable, which must be completed within one year, Macedonia received a provisional date to begin negotiations on EU membership in June 2019, provided that the country changes its name to the Republic Northern Macedonia and pay more attention to the agenda of reforms.
At the same time, the EU continues to support Macedonia through its financial assistance in the framework of the Instruments for the Promotion of Accession to the European Union. The IPA II program for the period from 2014 to 2020 provides funding of 664 million Euros for programs in the 8 priority sectors relevant to the functioning of the Macedonian economy, namely: democracy and governance, the rule of law and law, the environment and climatic conditions , transport, competitiveness and innovation, social development (education, employment, social security), agriculture and rural development, and regional and territorial cooperation.
Although full participation in the EU single market is a key priority for Macedonia, the country also concluded trade agreements with a number of other countries, including. free trade agreements with Ukraine, Turkey and the European Free Trade Association (EFTA - Switzerland, Norway, Iceland and Liechtenstein). In January 2007, previously concluded bilateral agreements with Albania, Bosnia and Herzegovina, Serbia, Montenegro, Kosovo and Moldova were replaced by members of the Central European Free Trade Agreement (CEFTA). Macedonia has been a member of the World Trade Organization (WTO) since 2003.
Despite membership in the CEFTA, regional economic trade is far from effective integration. There are non-transparent customs barriers to trade between CEFTA members, such as complex procedures at border crossings due to inspection work, as well as technical barriers such as sanitary and phytosanitary measures and veterinary control. Despite the general market of government purchases among the CEFTA countries, there is still a lack of transparency in public procurement. In the field of investment, Macedonia has concluded agreements on the promotion and protection of direct investment with 32 countries: Albania, Austria, Bosnia and Herzegovina, Bulgaria, Belarus, Belgium, Luxembourg, Germany, Egypt, Iran, Italy, India, Spain, Serbia, Montenegro, People's Republic of China Republic of Korea, Malaysia, Poland, Romania, Russia, Slovenia, Turkey, Ukraine, Hungary, Finland, France, Netherlands, Croatia, Czech Republic, Switzerland and Sweden.
Corruption and weak rule of law remain serious problems. Some enterprises complain about non-transparent rules and unequal observance of the law.
Unemployment remains at a consistently high level - about 23%, but it can be exaggerated because it does not take into account the presence of a vast gray market, which is estimated at between 20% and 45% of GDP, which is not fixed by official statistics.
Macedonia is working on the creation of a nationwide gas pipeline and distribution network. At present, Macedonia receives small amounts of natural gas from Russia through Bulgaria. In 2016, Macedonia signed a memorandum of understanding with Greece on the construction of a distribution hub that could be connected to the Trans-Adriatic pipeline that will pass through the region after completion, or to the Greek LNG import port.
Macedonia maintained macroeconomic stability during the global financial crisis by conducting a reasonable monetary policy that keeps the domestic currency tied to the euro and inflation at a low level. However, in the past two years, the domestic political crisis has hampered economic performance, slowing GDP growth in 2016, and domestic private and public investment has declined.
In 2017, public debt stabilized by about 47% of GDP, which is relatively low compared with the Balkan neighbors and the rest of Europe. In 2016, Macedonia issued Eurobonds in the amount of about 495 million dollars. The USA for financing 2016 and a part of requirements of the budget of 2017.