The Government adopted the budget review on October 13. Expenditures and revenues decrease by 0.5 percent, the deficit is maintained at 2.7 percent, while economic growth is projected at 2.8 percent.
Finance Minister Dragan Tevdovski said in the review elaboration that the adjustments have been made while taking into consideration political developments in the country, trends of Macedonian economy, as well as realization of revenues and expenditures.
“The review will slightly correct the revenue side of the budget. The projected goals of this year’s fiscal policy remain unchanged, designed in function of achieving the key objectives and priorities in society – higher growth, increased employment, raising the people’s living standard, higher level of social justice and intensifying EU and NATO integration processes,” said Minister Tevdovski.
According to him, the review ensures about EUR 50 million in financial support for municipalities, towards servicing a significant portion of their outstanding liabilities and institutions within their jurisdiction.
In parallel, the Government has proposed changes to the Law on Financing Local Self-Government Units with the aim of establishing a fiscal rule for planning of own budget revenues.
“The unrealistic planning of municipal budgets, namely the over-optimistic projection of revenues, is one of the reasons why local self-government units have created these liabilities in recent years,” stressed Tevdovski.
The review cuts the projected growth rate from 3.2 to 2.8 percent.
“Despite the significant economic growth in the second quarter, it was not sufficient to compensate for the poor activity in the first quarter. Therefore, the GDP growth rate has been cut to 2.8 percent. In the coming period we expect to maintain the positive signals among private investments and the high growth of exports and significant contribution of consumption on growth,” added Tevdovski.
The review will result in reallocation of funds among budget beneficiaries and increased support for the Health Insurance Fund, Pension and Disability Insurance Fund and the Employment Service Agency.