Going local will be the name of the game

The war in Ukraine was the trigger for many negative developments in the world economy, which is going through a very unstable period. Prices are rising rapidly, interest rates are being increased to slow down the inflation, energy prices and supply issues are only the tip of the iceberg of problems in the world economy. The EU is under even greater pressure, having in mind its dependence on Russian gas and oil and the need to switch to other sources. The economy is showing the first signs of a recession which could hit us more strongly than anyone expects. And the crisis is not only economic. The healthcare crisis with Covid is still underway, and on top of all that the war in Ukraine is fully changing the geopolitical situation in Europe and all over the world. Add to this the recent US – China tensions around Taiwan. These economic and geopolitical issues are hitting the business and we expect that many companies will struggle to keep their positive results and liquidity in the forthcoming period. Higher interest rates will lead to less investments and development project and will force managers to reduce costs of operations.

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One Crisis on Top of Another – the case of North Macedonia

As everywhere in the world, it all started to deteriorate with the COVID-19 pandemic. Pre-pandemic real GDP growth of 3.9 percent in 2019 turned into negative real GDP growth of 6.1 percent in 2020. Economic recovery started in 2021 but it did not offset fully the decline from the previous year as the real GDP growth in 2021 equaled 4 percent. In 2022, economic growth amounted to 2.4 percent and 2.8 percent in the first and second quarter, respectively. Given the fact that the impact from the energy prices spike started to materialize in the real sector operations, it is not very likely at this moment that the real GDP growth of 3.2 percent, as projected by the finance ministry, will be achieved in 2022.