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Form CH@: A754

Embassy of Switzerland in Skopje Country: of Last Updated: 2021

North Macedonia – Economic Report 2020 0. Executive Summary North Macedonia as a market is generally of limited interest for Swiss exporters given its relatively small size. For Swiss investors and importers, however, the country offers opportunities in sectors such as textile, adventure , automotive industry, light and ICT. Overall, the conditions for Swiss firms to do business in North Macedonia are favourable. Still shortcomings in the rule of law and political uncertainties are challenges that Swiss firm’s encounter. In 2020, North Macedonia faced an economic recession as a result of the impact of the COVID-19 crisis, leading to job losses in certain sectors and a decrease in imports, exports, as well as the inflow of foreign direct investments (FDI). However, the measures of the government helped to reduce the impact of COVID-19 and certain sectors are expected to recover quickly while in others such as textile and tourism it may take longer. 1. Economic Problems and Issues1

In 2020, the Republic of North Macedonia was experiencing the deepest recession year since its independence. The year started with indicators for moderate growth but took a sharp downturn as the COVID-19 crisis emerged and imposed restrictions that affected almost all sectors of the economy, the services sector in particular. The first 3 quarters of 2020 mark a real decrease of 5.9% of the GDP, which is in accordance to the projected expectations and predictions of the National of the Republic of North Macedonia. The economic activity in the last quarter, however, showed signs of an overall moderate influence of the health crisis on economic outputs of the country. With the starting of the vaccination process, the optimism and expectations amongst the economic operators started to return, particularly for the global growth in the medium term. Still, there is a high level of uncertainty, in particular with the development of the pandemic.

In to mitigate the effects of the pandemic, the Government intervened, which helped to prevent job losses but also increased the fiscal pressure as the public debt increased rapidly, reaching 65.2% of the GDP. Nevertheless, there were job losses in transport and storage, agriculture, energy, real estate, tourism and . Workers in the textile industry, being an important sector in the manufacturing sector with more than 37'000 employees, were also affected by the pandemic crisis. However, they managed to partially soften the affects by quickly shifting to production of protection masks and other protection equipment. The exports in this sector were also reduced to almost 11%, industrial production was reduced to almost 14%, which is identical to the job losses percentage. At the same time, employment in several other sectors, like ICT, health , , professional services, mining and manufacturing, in fact rose. In , according to the International Labour Organization (ILO) amongst the sectors most affected by COVID-19 in North Macedonia are: tourism, hospitality, transportation, warehousing and construction. According to a study by “Finance think” most sectors in 2021 might not return to the same economic performance as before COVID-19. However, certain sectors, especially export-oriented ones for example the automotive industry, might recover quickly, although there are exceptions in this respect, such as the textile industry and tourism, sectors that may take longer to recover.

Because of a drop in external demand and consequently a drop in economic activity, exports and imports declined. Furthermore, as a result of travel restrictions, there were fewer exports of services and less expenditures due to limited visits of the diaspora. This was partially compensated by bank and cash transfers from individuals in the diaspora to their relatives and personal network. External funding needs

1 Data: National Bank of the Republic of North Macedonia

1 were met through the successful issuance of a 700m EUR Eurobond but, the decline in FDIs inflows also left a financial gap that forced the Government to request a EUR 550m assistance from the IMF, the World Bank and the EU. A recovery in transfers and export of services should contribute to narrowing of the current account deficit in 2022-23 to more sustainable levels. Particularly having in mind that the rollout of vaccines is not going at the desired speed for many countries and is not expected to take place on a significant scale even towards the end of the year and, consequently, a return to normality not before late 2021.

However, there are encouraging signals from private consumption and investment. Consumption - on the basis of activity -, shows symptoms of recovery faster than expected, thus underscoring the resilience of the services sector. Investments were also made, propelled by the German auto industry, which takes almost half of the country's exports. However, investment growth is expected to be constrained in 2021 as well, despite the rock-bottom interest rates and favorable lending conditions. Since the business confidence took a hit in 2020 and until the global economic gathers pace, industrial capacities will continue to run on existing capacity and this will deter large scale investments.

On top of everything, there are other factors that impede recovery and development. These are: 1) political instability; and 2) the delay of the EU accession negotiations. The first is due to the tiny majority of the government coalition in the , which often results in blockades of the Parliament work by opposition parties. This at times impedes a normal functioning of the Parliament and slows down the reforms aimed at strengthening institutions, boosting competitiveness and improving the business environment. This may cause that the Government might not last a full term. The second factor is delaying the start of the EU accession negotiations of North Macedonia due to diverging interpretations over the linguistic and historic heritage of North Macedonia.

In conclusion, there are several risks that will directly influence the economic prospects and the speed of recovery in 2021. These are:  Further waves of COVID-19 due to slow rollout speed of the vaccines – might have an irreversible effects in many sectors of the fragile economy;  Political tensions and/or nationalist disputes – might further deepen the political instability;  and lack of accountability of public officials – major impediment for doing business; and  Debt servicing / balance of payment crisis – might trigger an inflation cycle.

In 2021, the Government adopted a multi-year structural reform Programme agreed with the . The measures include improving the business environment, combating , reforming the energy and transport markets, developing agriculture, and supporting education and the digital transformation of the country.

Vaccination will remain in the focus of the Government of the forthcoming period. Being a low income economy, it can’t compete with advanced economies in the vaccines bidding orders. It therefore relies on international support and the COVAX mechanism to ensure equitable access to vaccines. Delays in mass vaccination may lead to reappearance of infections and further obstacles and delays in recovery of normal economic activities.

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Government response to the pandemic crisis2

Since the outbreak of the pandemic, the Government of the Republic of North Macedonia has adopted in total five sets of measures, aimed at reducing the negative effects of the crisis on the economy. Four sets were brought in 2020 whilst the fifth set was adopted in 2021. Within the four sets in 2020, 70 different measures were implemented. These measures include direct support for families and individuals, the distribution of vouchers in the tourism sector, payment delay as well as restructuring of and prolonged payments of installments for companies and citizens. Furthermore, there were measures to support of the informal sector as well as financial support for companies. As a result, North Macedonia dedicated financial resources worth more than 9% of its GDP as economic measures for the reduction of the impact of COVID-19. Thereby, the total value of the four first sets of measures is circa 1 billion EUR and, until February 2021, almost 70% of these funds have been exhausted. Provided that there are credit lines within these sets that are still ongoing, the percentage of implementation will rise to 92%. Moreover, there are a number of measures within the third and the fourth set that will be implemented during 2021 and beyond.

The effects of the four economic sets on the economic activity and is limited but important. While the total unemployment rate on annual basis decreased by 0.9% from 2019 to 2020, there were still 16'700 officially registered job losses in North Macedonia from March 2020 to March 2021. Therefore, the decrease in the unemployment rate might also be due to a decrease in the number of active job seekers or emigration. However, it is estimated that the total assistance of EUR 704m reduced the decrease of the economic activity significantly – the decrease is expected to have been -8.4% as opposed to the recorded -4.5%. As the challenges with the effects of the pandemic are still ongoing, some of the measures have a spillover through 2021 and in the meantime a fifth set of measures has been adopted in April 2021, and the sixth set is already in the pipeline, the overall effectiveness and impact of the measures cannot yet be assessed at this stage.

2. International and Regional Economic Agreements

2.1. Country’s Policy and Priorities3 Central to North Macedonia's foreign policy agenda remains the integration into European and Euro- Atlantic institutions. Therefore, when it comes to economic policymaking, achieving full participation in the EU's single market is the key priority. The country’s aspirations received a long-awaited boost with the March 2020 decision of the to open accession negotiations, though the exact date of the start of negotiations still remains to be defined. To support the country’s convergence process, the EU provides significant financial assistance to North Macedonia through its Instrument for Pre-Accession (IPA). In total more than 600 million EUR have already been provided under the IPA II program for the period 2014-2020. Furthermore, the IPA III regulatory framework is expected to be adapted in 2021 and would then be effective for financial assistance until 2027. Besides, the countries efforts toward EU convergence is also supported by several multilateral financial institutions. The World Bank adopted in 2019 its new "Country Partnership Framework 2019-2023," with loans from the International Bank for Reconstruction and Development (IBRD) of up to $420m and investments from the International Finance Corporation (IFC) of up to $50m. Moreover, the European Bank for Reconstruction and Development (EBRD) approved in 2019 a new "Country Strategy 2019-2024." Although full participation to the EU single market is a key priority for North Macedonia, the country has also concluded trade arrangements with a number of other countries, including agreements with , , and the European Free Trade Association (Switzerland, , , and ). In January 2007, earlier bilateral agreements with , , , , and were replaced by membership in the Central European Free Trade Agreement (CEFTA). North Macedonia has been a member of the (WTO) since 2003. In the of investments, North Macedonia has concluded agreements with 33 countries from , Asia and North Africa to not only protect but also promote FDIs.

2 Source: Government of the Republic of North Macedonia, International Monetary Fund, the Employment Agency of the Republic of North Macedonia and State Statistical Office of the Republic of North Macedonia 3 Source: World Bank, European Commission, European External Action Service, Balkan Insight, U.S. Department of State, European Bank for Reconstruction and Development

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In 2019, discussions were initiated by North Macedonia with Serbia and Albania to enhance the economic integration of the three countries based on the EU model of the freedom of movement of services, goods, people as well as capital ( dubbed the “mini-Schengen”). Subsequently, an agreement between Serbia and Albania was signed on 20 November 2020, allowing the citizens of both countries to cross their by only using an identity card. It remains to be seen whether North Macedonia will also sign a similar agreement in the near future.

2.2. Outlook for Switzerland North Macedonia’s policy and priorities, in particular regarding economic and political alignment with European standards and principles when it comes to EU accession, are aligned with the interests of Switzerland. EU convergence is expected to make a significant contribution to the country’s stability and prosperity, thereby improving the prospects for Swiss firms trading with and investing in the country. The set of bilateral economic agreement provides favourable framework conditions for the further development of bilateral economic relations. Since May 2002, Switzerland’s trade relations with North Macedonia are regulated by the North Macedonia - EFTA agreement. A second session of the Joint Committee, held in in November 2008, contributed to further improve framework conditions. Other important economic agreements between Switzerland and North Macedonia include:

 Bilateral trade and economic cooperation agreement (in force since 01.09.1996);  Bilateral investment promotion and protection agreement (in force since 06.05.1997);  Bilateral double taxation avoidance convention (in force since 27.12.2000);  Bilateral arrangement related to trade in agricultural products (in force since 01.05.2002);  Bilateral aviation agreement (in force since 01.03.2010). On May 19, 2021, the double taxation between Switzerland and North Macedonia was amended to bring it in line with the latest international standards. The amendment agreement includes, among other aspects, the fostering of information exchange between North Macedonia and Switzerland. 3. Foreign Trade

3.1. Development and General Outlook4

In recent years, North Macedonia’s exports have been growing steadily, mainly as a result of FDIs into global value chains, thereby especially in the automotive industry. However, in 2020 a decline in exports was noticeable. Thus, exports decreased by 10 % from 2019 (EUR 6’433m) to 2020 (EUR 5’777m). As in the previous year, the largest share in the total export of North Macedonia went to (47%). The importance of Germany as a destination for North Macedonia’s exports reflects large FDIs of global producers of automotive components who export their products to Germany for final assembly. Bulgaria (4.7%), Kosovo (4.0%), Serbia (3.9%), (3.0%), (2.7%) and China (2.5%) were additional export markets. Some of the main export products were chemical materials (EUR 1'154m) electronic machinery (EUR 854m) and industrial machinery as well as equipment (EUR 726m). In 2020 not only exports decreased but also the imports to North Macedonia declined by 10% (total imports EUR 7’592m) compared to 2019. The largest share of imports came from the (15.41%), followed by Germany (10.7%), Serbia (7.4%), China (6.9%), (5.9%) and Turkey (5.1%). Among the main imports by North Macedonia are non-ferrous metals (EUR 1'069m), electrical machinery (EUR 686m) as well as non-metallic minerals (EUR 440m). Consequently, as last year, there was a trade deficit in 2020 that amounted to EUR 1’815m. Furthermore, the EU remains the largest trading partner of North Macedonia, accounting for 46.3% of the imports and 77.5% of the exports. Significant potential exists for North Macedonia to expand exports in specific sectors such as textile, tourism, agriculture, logistics, information technology and healthcare. However, to effectively compete in the global market and integrate into the global value chain, domestic firms will need to improve their offering and their productivity. The Swiss Cooperation Programme in North Macedonia includes several projects to increase exports, accelerate growth, and create jobs in

4 Source: State Statistical Office of the Republic of North Macedonia and the National Bank of the Republic of North Macedonia, for further trade statistics see Annex 3

4 the adventure tourism, textile, light manufacturing, agribusiness and IT sectors in North Macedonia. The country will also need to further enhance connectivity in terms of completion and maintenance of its transport infrastructure as well as streamlining of its custom procedures.

3.2. Bilateral Trade5

Compared to the year 2019 (with CHF 135m), the bilateral trade between Switzerland and North Macedonia increased in 2020 and amounted 150m CHF. While export from Switzerland (+27%) grew imports to Switzerland decreased (- 1%) in 2020 compared to 2019. Imports equalled CHF 74m and exports CHF 76m. This places Switzerland on the 27th place in terms of import and on the 30th place in regards to exports. Accordingly, Switzerland is a trading partner of modest importance for North Macedonia. Access to the Swiss market remains difficult for exporters from North Macedonia, partly because of the high requirements on the part of Swiss importers. Some exporters from North Macedonia, namely in the agricultural sector, were, however, able to successfully enter in the Swiss market after bringing their practice into line with the Bio Suisse standards in organic agriculture. Import from Switzerland to North Macedonia consisted primarily of chemical products and pharmaceuticals (29%), followed by machinery, appliances and electronics (20%), vehicles (19%), textiles, clothing and shoes (13%) as well as precision instruments, clocks/ and jewellery (6%). At the same time, the largest contributor to exports from North Macedonia to Switzerland came from textiles, clothing and shoes (63%), followed by forestry and agricultural products and fishery (13%). 4. Direct Investments

4.1. Development and General Outlook6 The authorities in North Macedonia’s have demonstrated generally a longstanding positive attitude towards FDIs. The country’s regulatory as well as legal framework is favourable to foreign investors. Furthermore, the authorities provide various incentives to attract new investors in the Technological- Industrial Development Zones (TIDZs) such as tax exemptions and in the form of financial contributions to the construction costs. As a result, the country has outperformed peer countries in attracting greenfield FDIs in the past few years. On top of that, while exports generally decreased in North Macedonia, this was not the case in the TIDZs, where they increased by 7% compared to 2019. This increase was linked to new agreements for investments in the TIDZs. In general, there has been a continuous increase in stock FDIs since 1997 with a total 5'704m at the end of 2019. Most FDI stock came from , followed by the United Kingdom, Greece, the and . All these countries accounted for 48% of the total. While an increase in FDI stock was noticeable, the overall inflow of FDIs in the year 2020 decreased by 40% and stood at EUR 240m. The largest FDI inflows in 2020 came from the United Kingdom (53% of the total), Germany (24%), Turkey (21%), of America (7%) and Bulgaria (5%). While the FDI inflow of China amounted to EUR -8.3m there are credit lines that North Macedonia is using from based in China for the construction of highways. Overall, among the main areas in which FDIs were made in North Macedonia are parts for the automotive industry, financial services, manufacturing, agriculture, forestry and fishing, information technology, mining, construction. To further stimulate investment, North Macedonia has an Economic Program, where individuals can apply and make investments in order to obtain the citizenship of North Macedonia. According to the World Bank Doing Business report of 2020, North Macedonia remains on the same level at 17th place. However, the report notes that there was an improvement in contract enforcement. Nevertheless, deficits continued to exist in the business environment in regard to the competitiveness. In the 2019 published World Economic Forums Global Competitiveness Report, this has already been clearly visible as North Macedonia was ranks 82nd out of 141 economies. For more than 70% of Swiss firms doing business in North Macedonia, uncertainties due to the political situation remains a key challenge in their operations in the country. Other challenges are administrative hurdles and

5 See Annex 4 for trade statistics from Swiss Customs Administration 6 Data: National Bank of the Republic of North Macedonia, Republic of North Macedonia Free Zone and Ministry of Labour and Social Policy of the Republic of North Macedonia

5 shortcomings in the rule of law as well as finding qualified employees. On top of that, corruption is an additional area of concern in North Macedonia. In this respect, Transparency International reported that the level of corruption in 2020 has remained the same as in 2019. North Macedonia was ranked by Transparency International at 111th place compared to 180 other countries in the 2020 Corruption Perceptions Index. The large informal economy – it is estimated that 18% of all employees in North Macedonia are working in the grey economy – and a lack of entrepreneurial culture also continues to negatively impact the business environment and competitiveness of the economy. The new Swiss Cooperation Programme 2021-2024 in North Macedonia aims to some of these shortcomings. More specifically, this means that projects are being pursued to foster the start-up ecosystem, reform the vocational training system in North Macedonia and improve the framework conditions (public finance management, tax administration, legal framework for insolvency and ). Furthermore, a new project is currently planned to contribute to the reduction of corruption.

4.2. Bilateral Investment Flows The FDI inflow from Switzerland to North Macedonia reached EUR 12m, placing Switzerland in 2020 as the 6th largest source of FDIs in North Macedonia. This represents a slight decrease compared to 2019 (EUR – 13m). The FDI inflows, however, are from year to year relatively volatile, a result of the limited number of Swiss investments in North Macedonia. By the end of 2019, overall stock FDIs from Switzerland amounted to EUR 183m7. There are more than 30 known Swiss firms currently present in North Macedonia and an additional dozen companies that represent or distribute Swiss products. The largest Swiss investments in North Macedonia are in the steel (Duferco, Makstil), tobacco (Socotab, Frana), electro mechanic devices (Baumer), healthcare products (Rontis), transport services (Kuehne & Nagel, MSC), construction (Madal Bal), mining (Euromax) and construction materials (Ruchti Aerni, City Beton), banking (Silk Road Bank), and software services (Netcetera, Inside Solutions, Digicube) sectors. Other Swiss companies are represented through either their representation offices or through third parties representing their interests. Over 3’400 people are directly working for Swiss companies operating in North Macedonia, while an estimated 15’000 people are indirectly employed by Swiss companies (employed by suppliers of goods and services to Swiss companies in the country). In September 2019, Swiss companies present in the country gathered to create the Switzerland – North Macedonia Business Club to foster exchange of information among them, promote their interest towards the authorities, and support new Swiss companies interested in investing in the country. The Business Club was established within the Macedonian Chambers of Commerce. Swiss companies interested in investing in North Macedonia can also obtain information from the government agency Invest in North Macedonia and the Free Zones Authority. In Switzerland, Switzerland Global Enterprise (S-GE) and the Chamber of Commerce Switzerland- (SEC) are the relevant organizations supporting Swiss companies interested in investing in North Macedonia.

5. Trade, Economic and Touristic Promotion

5.1. Foreign Economic Promotion Instruments Switzerland enjoys an excellent reputation in North Macedonia, among others, thanks to the strong human links through North Macedonia’s diaspora in Switzerland and its substantial cooperation programme in the country. Through the various projects of the Swiss Cooperation Programme funded by the Swiss Agency for Development and Cooperation (SDC) and the Swiss State Secretariat for Economic Affairs (SECO), the Swiss Embassy has developed an extensive network of contacts in the public and private sectors of direct relevance to Swiss companies interested in trading with or investing in North Macedonia. Public events in the framework of the various Swiss-funded projects usually receive important media coverage, thereby contributing to enhancing the visibility of Switzerland as an economic partner. The Swiss Embassy invites Swiss companies operating in North Macedonia and companies from North Macedonia with a link to Switzerland to relevant events and has supported their networking as well as

7 Source: National Bank of the Republic of North Macedonia

6 the creation of the Switzerland – North Macedonia Business Club within the Macedonian Chambers of Commerce. The Embassy is actively fostering opportunities for cooperation between Swiss companies and projects of the Swiss Cooperation Programme, among others in the area of and training (VET) or in the co-financing of new projects in North Macedonia. The Embassy is also engaged in facilitating contacts for Swiss companies with the authorities of North Macedonia and to local counterparts. When made aware of specific opportunities, the Swiss Embassy informs Switzerland Global Enterprise (S-GE) and specialized associations of public tenders issued by North Macedonia’s authorities. Promotion material from Switzerland Tourism and Presence Switzerland is available at the Embassy for display to visitors or distribution at specific events, and shared on the Embassy’s Facebook page when relevant. In addition to the Switzerland – North Macedonia Business Club within the Macedonian Chambers of Commerce and the Chamber of Commerce Switzerland – Central Europe (SEC), Switzerland Global Enterprise (S-GE) also offers support for Swiss companies interested in trading with or investing in North Macedonia.

5.2. North Macedonia’s Interest for Switzerland For North Macedonia’s tourists, Switzerland is of modest importance as a tourism destination. Accordingly, Switzerland Tourism is not present locally. The main destinations for tourists from North Macedonia are the neighbouring countries (Greece, Albania, Bulgaria, and Serbia) or countries in the (Turkey). The direct flights between Switzerland and North Macedonia are mostly used by members of the diaspora of North Macedonia in Switzerland visiting North Macedonia, or their relatives living in North Macedonia and visiting them in Switzerland. There is however increasing interest among Swiss tourists for North Macedonia as a destination for cultural and adventure tourism. Before the pandemic, there were daily direct flights between Skopje and Zurich (/Swiss and ) and Skopje and --Freiburg (Wizz Air). Edelweiss and Wizz Air were both also operating seasonal flight connections from Basel respectively from Zurich to Ohrid, an important tourist destination in North Macedonia. In addition, regular bus-lines connect North Macedonia and Switzerland. Since the demand to travel is primarily driven by diaspora relations, it is expected that the pre-COVID-19 connectivity between the two countries will be reached again. Significant interest for Swiss expertise exists in various sectors, including disaster risk reduction, waste water management, nature conservation, tourism and hospitality, agribusiness, entrepreneurship and . The transfer of such expertise is facilitated, among others, in the framework of projects of the Swiss Cooperation Programme 2021-2024 in North Macedonia. The transfer of Swiss expertise is also sought after through the establishment of cooperation between Swiss education institutions and their counterparts in North Macedonia. Such cooperation exists notably in the forestry sector. Switzerland is not the common destination chosen by students from North Macedonia for higher education. Research, doctoral and post-doctoral fellowships granted by the Federal Commission for Scholarships encounter limited interest among students from North Macedonia. Large businesses and wealthy individuals from North Macedonia are well aware of Switzerland as a location offering competitive financial services. Therefore, it is likely that some of the FDIs in North Macedonia originating from Switzerland are actually funds from North Macedonia channelled through Swiss financial institutions.

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ANNEX 1

Economic Structure of North Macedonia8

Distribution of GDP (%) 2014 2019

Primary Sector 10.0% 8%

Industry 22.8% 23.5%

Services 53.8% 55.2%

Distribution of Employment 2014 2019

Primary Sector 18.5% 13.9%

Industry 30.4% 31.1 %

Services 51.2% 55.0 %

8 Source: World Bank

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ANNEX 2

Key Data9

2019 2020 2021 GDP (USD bn) 12.5 12.3 13.8 GDP/capita (USD) 6’044 5’918 6’656 Growth (% GDP) 3.2 -4.5 3.8 Inflation (%) 0.8 1.2 1.963 Unemployment (%) 17.3 16.4 16.341 Budget Balance (% GDP) -2.1 -8.1 n.a Current Account Balance (% GDP) - 3 - 4 - 3 Public Debt (% GDP) 57.6 65.2 n.a Debt Services (% of Exports) 4.2 n.a n.a Reserves (in months of import) 4.2 n.a n.a

Estimated by the World Bank

9 Source: International Monetary Fund, World Economic Outlook (April 2021), National Bank of the Republic of North Macedonia, World Bank

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ANNEX 3

Trade Partners10 Year: 2020

Exports Imports

Value Share Change Value Share Change Rank Country Rank Country (EUR m) (%) (%) (EUR m) (%) (%) United 1 Germany 2‘717.28 47.03 -13.13 1 1‘170.00 15.41 20.70 Kingdom

2 Bulgaria 271.89 4.71 -13.38 2 Germany 809.06 10.66 -15.81

3 Kosovo 233.70 4.04 -21.47 3 Serbia 558.34 7.35 -7.91

4 Serbia 223.13 3.86 -10.03 4 China 522.55 6.88 7.32

5 Hungary 171.56 2.97 5.25 5 Greece 451.71 5.95 -33.93

6 Belgium 157.49 2.73 -26.08 6 Turkey 388.47 5.12 -4.04

7 143.11 2.48 -17.67 7 Italy 338.86 4.46 -28.08

8 United Kingdom 142.59 2.47 -0.63 8 Bulgaria 309.72 4.08 -4.55

9 China 141.81 2.45 -4.82 9 211.99 2.79 -10.62 United States 10 Netherland 111.83 1.93 6.06 10 207.54 2.73 -25.02 of America

30 Switzerland 38.37 0.66 7.87 27 Switzerland 83.61 1.10 48.28

95 Liechtenstein 0.10 0.00 30.00 116 Liechtenstein 0.06 0.00 47.27

Total EU-27 4‘480.00 77.53 -11.24 Total EU-27 3‘516.30 46.32 -18.19

Total CEFTA 638.46 11.05 -14.13 Total CEFTA 735.31 9.68 -5.62

Total 5‘777.90 100.00 -10.19 Total 7‘592.00 100.00 -10.06

10 Source: National Bank of the Republic of North Macedonia, State Statistical Office of the Republic of North Macedonia

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ANNEX 4

Trade between Switzerland and North Macedonia11

Exports Imports Trade balance Annual Change Annual Change (mil. CHF) (mil. CHF) (mil. CHF) 2013 51 - 6 % 74 1 % -23 2014 45 -13 % 76 2 % -31 2015 41 -7 % 66 -14 % -25 2016 41 -1 % 65 -1 % -24 2017 48 18 % 72 11 % -24 2018 55 14 % 78 8 % -23 2019 60 9% 75 -4% -15 2020 76 27% 74 -1 % - 2

Change from Share of 2019 2020 Previous Main Swiss Exports (mil. CHF) Total Year Chemical products and pharmaceuticals 18.61 22.25 19.5% 29.3% Machines, appliances, electronics 6.11 15.63 155.8% 20.6% Vehicles 14.68 14.58 -0.7% 19.2% Textiles, clothing, shoes 7.07 9.91 40.1% 13.0% Precision instruments, clocks/watches & jewellery 5.34 4.48 -16.2% 5.9% Metals 1.54 2.35 52.0% 3.1%

Change from Share of 2019 2020 Previous Main Swiss Imports (mil. CHF) Total Year Textiles, clothing, shoes 48.05 47.19 -1.8% 63.3% Forestry and agricultural products, fisheries 5.79 9.45 63.2% 12.6% Various goods such as music instruments, home furnishings, toys, sports equipment, etc. 4.18 5.51 31.8% 7.4%

Leather, rubber, plastics 7.92 3.10 60.9% 4.2% Machines, appliances, electronics 2.53 3.07 21.3% 4.1% Metals 2.10 2.36 12.4% 3.2% Vehicles 0.67 2.01 200.0% 2.7%

11 Source: Swiss Customs Administration

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ANNEX 5

Main Investing Countries12 Year: 2020

Net Inward Direct Previous Year Net Inward Rank Country Investments Flow Share of Total Direct Investment Flow (EUR m) (EUR m)

1 United Kingdom 127.33 53.09 -78.73

2 Germany 56.70 23.64 48.59

3 Turkey 49.28 20.55 55.46

United States of 4 16.01 6.68 21.12 America

5 Bulgaria 12.22 5.09 23.47

6 Switzerland 12.05 5.02 -13.50

7 Italy 8.09 3.37 16.48

8 Greece 6.65 2.77 29.68

9 Serbia 5.07 2.11 11.78

10 4.15 1.73 -0.78

Liechtenstein 0.13 0.05 1.97

Slovakia -11.02 -4.59 7.66

Belgium -21.54 -8.98 14.22

Total 225.07 93.85 398.76

Undistributed-Reinvested Earnings and Part of Other 14.76 6.15 0.00 Capital

Total Inward DI Flows 239.82 100.00 398.76

Total Inward DI Flows 29.84 13.26 220.10 (EU-27 only)

12 Source: National Bank of the Republic of North Macedonia

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