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Impact of global economic crisis on the economies of Western Balkan (Macedonian economy)

Abstract

The paper intends to analyze the impact of global economic crisis on the economies of Western Balkan (Macedonian economy). The purpose of the paper is not to analyze the global crisis impact on specific sectors of the economies of the Western Balkan Countries, indeed, it focuses mainly on the macroeconomic level, identifying and analyzing fluctuations of major macroeconomic indicators of the economies of this Region. In this regard the paper analyzes the trends of macroeconomics indicators that reflect the development and macroeconomic balances of those economies, such as GDP, the level of employment, inflation, budget deficit, trade relation, etc, in two periods of time: before the crisis, and during the years of crisis. Highlighting the deterioration of these indicators, the paper tries to identify factors that have contributed to these results, for example the level of opening of the economies of these countries, foreign direct investment, remittances, etc.

This paper basically discuss the financial crisis and impact of financial crisis in Balkan. There is a fear that his economic crisis will take hold of Europe if it is not controlled. Europe is one of the biggest economies of the world so almost all the countries over the globe are also having a threat of facing the financial crisis. The world financial crisis emerged from a property bubble and a credit boom. Bad debts soared and banking sector in the developed economies became insolvent. The implication of the crisis to the western Balkans has been not of a sort of financial crisis, but an economic turbulence which has occurred as a result of lack of demand in the world markets to the Western Balkan products and falling sources of finance.

Investments, remittances, industrial production, foreign exchange reserves and employment rates have fallen

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