27th February 2022, Skopje – We stand ready to adopt measures and policies in the interest of citizens, primarily aimed at protecting the most vulnerable groups, as well as supporting the economy, as Minister of Finance, Fatmir Besimi wrote in his article dedicated to the Russia-Ukraine crisis.
“Amid crises like this, making a thorough analysis is of particular importance, by taking into account all parameters, even those that seem minor and trivial at the moment, all to the end of setting as more accurate expectations as possible. Neither pessimism nor optimism should be spread, we should be rather realistic and take actions by keeping pace with the ongoing developments. By having such strategy in place, we also acted during the pandemic, when 6 sets of anti-crisis measures were adopted, being intended for the citizens and the business sectors, with all reports of the international institutions acknowledging our country’s effective and prompt response thereto” – as Minister of Finance wrote.
In his article, he points out that adequate measures have already been undertaken, geared towards protecting the living standard of the citizens, by setting margin cap on part of the commodities. Moreover, VAT on electricity was reduced, thus lowering the electricity-related costs for the citizens.
“We are attentively monitoring the developments, thus creating scenarios to accord with the potential outcome therefrom. Commodity reserves are at satisfactory level, the Budget is liquid and we have the necessary funds to take actions should a need arise therefor. Instruments have also been put into place in case of a need to adapt to major market disruptions”, Minister Besimi pointed out.
Under the analysis about the direct exposure of our economy to Russian and Ukraine economies, he said it is relatively low. Imports to and exports from each of these countries ranges around 1%. In addition, their share in the FDIs in our country, as well as the inflow of remittances account for below 1%.
However, what he points out in his article is that the challenges the European economies are to face will be reflected in our economy. Developments in Ukraine might have negative impact on bot the European and the global economies, via additional disruptions of global supply chains, i.e. negative impact on foreign demand. As a small and open economy, being closely related to the European one, these disruptions will be undoubtedly felt in our country as well. At the same time, this might cause increased caution among foreign and domestic investors, which would affect the level of investments being made.