Using a mixed input-output framework, this study examined potential changes in sector output and water requirements at national level in Macedonia arising from climate change. By defining three climate change scenarios and exogenously specifying the warming shocks for five key agricultural sub-sectors, the direct and indirect effects on the economy in terms of output and water demand were quantified. In general, the results indicated that except for cereals and grapes, agricultural production would benefit from the low climate change scenario, while there would be negligible effects on the rest of the economy. In contrast, the medium and high climate change scenarios would most likely negatively affect agriculture, with severe losses in grape, apple and cereal production, but again with low effects on other economic sectors. These results on the potential economic and physical impacts of climate change can help decision makers formulate future adaptation measures for the Macedonian agriculture sector.