5th March 2021, Skopje – Interest rate on the eighth Eurobond being issued this week in our country, is much lower than in many countries in the EU or those with even higher credit rating than ours, such as Croatia, Turkey and Serbia. However, investors have demonstrated greater confidence in our economy and its outlook, whereby historically low interest rate of 1.625% has been attained, Minister of Finance, Fatmir Besimi pointed out at “Top Tema” political show on TV Telma.
– We managed to attain historically low interest rate of 1.625% on the eighth Eurobond, recording many-fold decrease when compared to the previously issued Eurobonds in the country, being also lower than in many countries with even higher credit rating than ours. Thus for instance, last week, Croatia issued two Eurobonds amounting to EUR 1,000,000,000 each, with interest rates accounting for 1.75% and 1.125%, respectively. Furthermore, last week, Serbia also issued Eurobond on the international capital market, being worth EUR 1, 000,000,000 with an interest rate accounting for 1.65%. Eurobonds issued by Turkey at mid-January this year, amounted to EUR 1.75 billion, with interest rates accounting for 4.75% and 5.875%, respectively. In December last year, Ukraine issued Eurobond worth EUR 600 million, with an interest of 7.253%. At the beginning of December last year, Montenegro issued Eurobond worth EUR 750 million, with an interest of 7.253%. Furthermore, at the end of November, Romania issued two Eurobonds, whereby the first Eurobond amounted to EUR 1,500,000,000 with an interest rate of 2.625%, while the other one amounted to EUR 1,000,000,000, the interest rate of which accounted for 1.375%. In the course of November last year, Turkey also issued Eurobond, amounting to EUR 2.3 billion with an interest rate of 5.95%, as well as Serbia, the issued Eurobond of which amounted to EUR 2,000,000,000 with an interest rate of 2.125%, Besimi said.
Minister stressed that the funds provided under this Eurobonds will be used for refinancing the Eurobond issued in 2014, the interest rate of which accounted for 3.975%, adding thereby that EUR 82.25 million will be saved on the basis of the low interest on the newly issued Eurobond.
Minister of Finance pointed out that increase in the budget deficit and the public debt, in times of COVID-19 crisis has become a reality for almost all global economies, including ours. He said that the sovereign debt in the economies such as Spain, Italy and Greece increased by more than 20 percentage points. Minister said that as of now, post-crisis policies would be of greatest importance to the end of stabilizing and revitalizing the economy, also including the public debt stabilization.
– As regards public debt, the most important thing is how we spend the public funds and whether we will be able to service the public debt in future. It is no coincidence that medium-term planning has been incorporated in the 2021 Budget. Medium-term framework covers the period as of 20215 inclusive, being based on three components: growth-related plan – how to increase and accelerate the growth to 5.9% in 2025, the second component is the budget consolidation and the third component is the public investment plan, amounting to EUR 3.2 billion. Fiscal consolidation will provide for gradual reduction of budget deficit and hence the public debt, which is to be reduced to 58.8% of GDP by 2025. In this respect, the actions to be taken will be aimed at increasing the revenues by improving the collection, improving the expenditure execution, i.e. the execution of capital expenditures, as well as ensuring new sources of financing the deficit, Minister of Finance, Fatmir Besimi pointed out.