Macroeconomic Forecast Macedonia

Industrial production fell by 0.4% y-o-y in May, according to latest data from the statistical office. Manufacturing activity - which was hit hard by the economic downturn - fell by 5.3% y-o-y. The number of employees in industry fell by 6.5% y-o-y in the same month. We expect industry to recover in the second half of the year, targeting 3.0% growth in 2010. As the economic recovery accelerates from 2011, industrial output growth should average between 5% and 6% annually. The risks to our core scenario lie mainly on the downside given the threat of a double-dip recession.

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