Economy of the Republic of Macedonia
Encyclopedia
The breakup of Yugoslavia
Socialist Federal Republic of Yugoslavia
The Socialist Federal Republic of Yugoslavia was the Yugoslav state that existed from the abolition of the Yugoslav monarchy until it was dissolved in 1992 amid the Yugoslav Wars. It was a socialist state and a federation made up of six socialist republics: Bosnia and Herzegovina, Croatia,...

 in 1991 deprived the Economy of the Republic of Macedonia
Republic of Macedonia
Macedonia , officially the Republic of Macedonia , is a country located in the central Balkan peninsula in Southeast Europe. It is one of the successor states of the former Yugoslavia, from which it declared independence in 1991...

, then its poorest republic (only 5% of the total federal output of goods and services), of its key protected markets and large transfer payments from the center. An absence of infrastructure, United Nations
United Nations
The United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...

 sanctions on its largest market Federal Republic of Yugoslavia, and a Greek
Greece
Greece , officially the Hellenic Republic , and historically Hellas or the Republic of Greece in English, is a country in southeastern Europe....

 economic embargo hindered economic growth until 1996.

Worker remittances and foreign aid have softened the subsequent volatile recovery period. GDP has increased each year except in 2001, rising by 5% in 2000. However, growth in 1999 was held down by the severe regional economic dislocations caused by the Kosovo war
Kosovo War
The term Kosovo War or Kosovo conflict was two sequential, and at times parallel, armed conflicts in Kosovo province, then part of FR Yugoslav Republic of Serbia; from early 1998 to 1999, there was an armed conflict initiated by the ethnic Albanian "Kosovo Liberation Army" , who sought independence...

.

Successful privatization in 2000 boosted the country's reserves to over $700 million. Also, the leadership demonstrated a continuing commitment to economic reform, free trade, and regional integration. The economy can meet its basic food needs but depends on outside sources for all of its oil and gas and most of its modern machinery and parts. Inflation
Inflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...

jumped to 11% in 2000, largely due to higher oil prices.
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