Macedonia's GDP will grow by 1.4 percent in 2013, according to the latest World Bank South East Europe Regular Economic Report published on Tuesday.
The group of six South East European countries made a fragile recovery: its combined real GDP is projected to grow 1.7 percent in 2013 after a 0.6-percent decline in 2012, according to the report.
However, the recovery in Macedonia is still tentative. One of the main worries is that Macedonian economy will continue to be plagued by high unemployment.
The 53-percent youth unemployment in Macedonia is particularly dire. The country is not creating jobs fast enough to absorb new entrants into the labor force. In fact, the jobs situation is worse than the dismal unemployment figures because so many leave Macedonia to work elsewhere.
Zeljko Bogetic, Lead Economist in the World Bank's Europe and Central Asia region and co-author of the report, suggested that structural reforms are key to a more robust recovery.
"The investment climate needs to improve substantially, especially in the main areas of weaknesses: construction permits and licenses, barriers to entrepreneurship and skills, and infrastructure. Its neighbors could learn from Macedonia, which continues to have the most favorable investment climate in the region as measured by the Doing Business indicators," Bogetic said.
Macedonia's economic growth is expected to be moderate initially but gradually speed up in the second half of the year with the implementation of public and foreign direct investment plans./.