The unemployment rate in MK remains at 11.50% for December 2025, matching the September reading and marking a notable decline from 12.30% in December 2024. This stability suggests a plateau in labor market recovery after a steady downward trend over the past 18 months. The rate remains elevated relative to pre-pandemic levels, reflecting structural challenges in MK’s economy.

Drivers this month

• Service sector employment growth slowed, limiting further unemployment gains.
• Manufacturing layoffs stabilized after earlier contractions.
• Seasonal hiring in agriculture offset some job losses in urban areas.

Policy pulse

Monetary policy remains accommodative with the central bank maintaining interest rates near historic lows. Inflation is contained around 3.20%, close to the 3% target, allowing steady financial conditions without tightening. Fiscal stimulus programs continue to support job creation, though budget constraints limit expansion.

Market lens

Immediate reaction: The MKD currency weakened 0.30% against the EUR following the release, reflecting investor caution amid stagnant labor market data. Short-term government bond yields edged up by 5 basis points, signaling mild concerns over growth momentum.

Core macroeconomic indicators provide context for the unemployment rate’s trajectory. GDP growth for Q3 2025 was 2.10% year-over-year, a slowdown from 2.80% in Q2. Inflation remains moderate at 3.20%, while wage growth has been sluggish, averaging 1.50% annually. Labor force participation has stabilized at 62%, slightly below the regional average.

Monetary Policy & Financial Conditions

The central bank’s policy rate stands at 2.00%, unchanged since mid-2024. Credit growth has slowed to 4.50% annually, reflecting cautious lending amid global uncertainties. The financial sector remains resilient, with non-performing loans steady at 3.80% of total loans.

Fiscal Policy & Government Budget

Fiscal deficits narrowed to 3.50% of GDP in 2025, down from 4.20% in 2024. Government spending prioritizes infrastructure and social programs aimed at reducing unemployment. However, rising debt service costs constrain further fiscal expansion.

External Shocks & Geopolitical Risks

MK faces moderate risks from regional geopolitical tensions and global supply chain disruptions. Energy price volatility has increased input costs for manufacturing, pressuring employment in export sectors.

Drivers this month

• Stagnation in service sector hiring, particularly in retail and hospitality.
• Steady employment in construction, supported by ongoing public projects.
• Moderate seasonal employment gains in agriculture and tourism.

Policy pulse

The central bank’s neutral stance supports stable borrowing costs, but inflation pressures remain manageable. The labor market’s plateau suggests limited immediate need for monetary tightening.

Market lens

Immediate reaction: MKD depreciated 0.30% versus the EUR, while 2-year government bond yields rose 5 basis points, reflecting cautious investor sentiment amid unchanged unemployment.

Looking ahead, MK’s unemployment rate trajectory depends on several factors, including domestic policy responses and external economic conditions. We outline three scenarios with associated probabilities:

Bullish Scenario (30%)

• Accelerated fiscal stimulus boosts infrastructure and SME hiring.
• Global trade recovery supports export-driven manufacturing jobs.
• Unemployment falls below 10.50% by mid-2026.

Base Scenario (50%)

• Gradual economic growth continues at ~2% annually.
• Labor market remains stable with unemployment near 11.50%.
• Moderate wage growth and steady inflation.

Bearish Scenario (20%)

• Geopolitical shocks disrupt supply chains and investment.
• Fiscal tightening reduces public sector employment.
• Unemployment rises above 12.00% by late 2026.

Structural & Long-Run Trends

Long-term challenges include a skills mismatch, aging workforce, and limited labor mobility. Addressing these will require reforms in education, training, and labor market flexibility to sustain employment gains.

In summary, MK’s unemployment rate remains stable at 11.50%, reflecting a labor market in cautious equilibrium. While recent declines have slowed, the overall trend since early 2024 is positive. Monetary and fiscal policies remain supportive but face constraints. External risks and structural issues pose ongoing challenges. Policymakers should focus on targeted interventions to accelerate job creation and improve workforce skills to ensure a durable recovery.

Insight: Unemployment Rate vs. MKEX Index Since 2020

Year	Unemployment Rate (%)	MKEX Index (Year-End)
2020	14.20	1,050
2021	13.50	1,120
2022	12.90	1,180
2023	12.80	1,250
2024	12.30	1,310
2025	11.50	1,380

This table shows a clear inverse relationship between unemployment and the MKEX equity index. As unemployment declined from 14.20% in 2020 to 11.50% in 2025, the MKEX index rose by 31.40%, reflecting improving economic conditions and investor confidence.

FAQ

What does the latest unemployment rate in MK indicate?

The 11.50% unemployment rate suggests a stable labor market with gradual improvement but persistent structural challenges.

How does the unemployment rate affect MK’s monetary policy?

Stable unemployment near 11.50% supports the central bank’s current accommodative stance, with no immediate pressure to tighten.

What are the risks to MK’s labor market outlook?

Risks include geopolitical tensions, fiscal constraints, and structural mismatches in skills and labor mobility.

Key takeaway: MK’s unemployment rate plateau at 11.50% signals a cautious labor market recovery, requiring targeted policy to sustain momentum and address structural issues.

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.

Updated 12/5/25