North Macedonia is experiencing a significant increase in tourism, with a 75% rise in visitors during the first half of 2022 compared to the previous year. This surge in tourism is juxtaposed with a decline in foreign investments, raising questions about the overall economic landscape of the country.
Key Takeaways
- Tourism Growth: 75% increase in tourists from January to June 2022.
- Foreign Investment Decline: A drop of 14.7 million euros in foreign investments over the last two quarters.
- Domestic vs. Foreign Tourists: Domestic tourists increased by 25.4%, while foreign tourists surged by 131.3%.
Surge In Tourism
The State Statistics Agency reported that North Macedonia welcomed 83,532 tourists in June 2022 alone, with 67.7% being foreign visitors. The increase in overnight stays was also notable, with a 66.3% rise compared to the same period last year. This growth is attributed to the country’s rich cultural heritage, natural beauty, and improved travel conditions post-pandemic.
- Domestic Tourists: Increased by 25.4%.
- Foreign Tourists: Increased by 131.3%.
Economic Challenges: Foreign Investments
Despite the positive tourism trends, North Macedonia faces challenges in attracting foreign investments. Recent reports indicate a significant decrease in foreign capital inflow, with a drop of 14.7 million euros over the last two quarters. The government disputes these figures, claiming that many foreign enterprises are still profitable and operational.
- Investment Decline: 9.3 million euros decrease in the second quarter alone.
- Pre-Pandemic Comparison: Investments fell from 133 million euros to 119.5 million euros in nine months.
Government Response and Opposition Concerns
The Macedonian government, led by Prime Minister Zoran Zaev, asserts that foreign direct investments are still being registered, with 12 new investments in various stages of realization. However, the opposition party, VMRO-DPMNE, argues that the current administration has failed to foster a conducive environment for investment, citing significant increases in foreign investments in neighboring countries like Bulgaria and Serbia.
- Government Claims: 71% of foreign enterprises are profitable.
- Opposition View: Alarming decline in investments compared to regional peers.
The Role Of Political Stability
Economic analysts highlight the correlation between political stability and economic growth. The ongoing political challenges in North Macedonia are believed to impact investor confidence and economic performance. Analysts suggest that a stable political environment is crucial for attracting and retaining foreign investments.
- Political Instability: Affects economic growth and investor confidence.
- Future Outlook: The People’s Bank of North Macedonia anticipates a gradual stabilization of foreign direct investments in the coming years.
Conclusion
While North Macedonia is witnessing a remarkable increase in tourism, the decline in foreign investments poses a significant challenge to its economic growth. The government must address these issues, focusing on creating a stable political environment to attract and retain foreign capital, ensuring that the tourism boom translates into broader economic benefits for the country.
