15th March 2022 – We are facing immense energy and price crisis this year, and we need to adjust thereto, which should be also reflected in the Budget, or else this could not be realized. Therefore, we are carrying out consultations and revising the Budget so to adjust to the upcoming developments, and although last year was tough, we managed to achieve growth. However, although a growth is planned to be attained this year as well, it will be revised due to the drastically changed situation.
This was pointed out by Minister of Finance, Fatmir Besimi in his interview for “24 Analiza” TV Show, thereby underlined that this year’s projected 4.6% growth was based on scaled up investments, which remains to be a priority, being covered in the new set of measures as well.
“Both, in 2021 and 2022, the growth was generally based upon the scaled up investments. Growth Acceleration Plan was presented, which in addition to the budget funds, it also envisages promotion of instruments in the upcoming period, thus attracting foreign capital and boosting growth accordingly. Investments are also covered under the new set of measures, which impact is estimated to exceed EUR 500 million”, Minister said.
He also mentioned the measures, which are to be implemented via the Development Bank. It is a matter of a credit line with favourable terms and conditions for the companies, amounting to EUR 100 million, as being discussed with the European Investment Bank. They are intended for green transition, digitalization and competitiveness, whereby, additional EUR 200 million will be mobilized as favourable loans from the commercial banks, being geared towards making investments.
“While borrowing EUR 100 million from EIB, EUR 300 million will be provided from commercial banks as favourable loans intended for the business sector, to be followed by a fiscal consolidation not only on the expenditure side, but also with respect to the revenues. The economic activity amounting to EUR 300 million will bring about over EUR 100 million revenues”, Minister pointed out.
Given that the undertaken activities aim to encourage companies to make investments, he also mentioned the respective Guarantee Fund, which is also part of the set of measures, thus providing the companies facing difficulties, with the possibility to be extended loans, and become creditworthy via the guarantee from the Development Bank.
In his interview, he announced that by the end of the year, funds will be made available by the EC under the Economic and Investment Plan for the Western Balkans, being a fresh instrument, which is to offer favourable guarantees for the development national banks, being intended for major investment projects.
Republic of North Macedonia, as Minister said, will be among the first countries to use this instrument, pointing out that this would be exceptional support for our business sector, without thereby burdening the Budget with a deficit and public debt.
He also mentioned that the execution of capital expenditures this year was higher by 40% than in the same period last year, thereby adding that he, as a Minister of Finance prefers and it is favourable for our economy to keep this year’s capital expenditure projections in the Budget, amounting to Denar 38.2 billion, which are higher by 28% than last year.
“Last year, the execution of capital expenditures accounted for 81%. We are yet to see the upcoming developments this year, since the price and energy crises led to various disruptions on the global markets. Accordingly, our country, with share of trade of more than 77% with the EU, is also not immune thereto. This also depends on the set of measures. As a Minister of Finance and in relation to our economy, this structure of the Budget is preferable, which was stressed in the Parliament and when designing the respective Budget, Minister of Finance, Fatmir Besimi said.