26th July 2022, Skopje – 2022 Supplementary Budget, adopted by the Parliament, incorporates the ongoing economic developments, allocating funds for cushioning the crisis effects, maintaining the growth dynamics and providing for fiscal sustainability in the medium term and, what is most important, financing thereof is also provided as projected and the most optimal ways of financing are sought for,
Minister of Finance, Fatmir Besimi, pointed out in his guest appearance on TV 24 News, underlining that under the Supplementary Budget allows for restructuring of the expenditure side and adjusting of the revenue side, all to the end of meeting the needs for support of the citizens and the businesses.
“Under the Supplementary Budget, changes have been made in terms of the funds allocate in the first half of the year for coping with the crisis. Hence, without the Supplementary Budget, all funds envisaged for the anti-crisis measures have been reallocated, support for ESM (Macedonian Power Plants) needs has been provided with the citizens paying only 20% of the energy price, as well as funds for increased pensions in line with the new methodology, increased minimum wage in the public sector, funds for wage increase subsidies for the employees in the private sector, along with other measures undertaken for the purpose of supporting the business sector and the citizens, including for the coming 6-month period as well,” Minister Besimi emphasized.
He also added that additional Denar 3.2 billion is provided for agriculture subsidies for strategic products and increased yield, with Denar 2.4 billion for the beneficiaries of guaranteed minimum income, additional funds for the increased wages by 15% in the education sector, additional funds for development of the economy and additional Denar 1.1. billion for “MyVAT” Project, funds refunded to the citizens.
As regards the anti-crisis measures, the Minister underlined that EUR 76 million or Denar 4.7 billion is envisaged under a special program, although the amount of funds provided for the respective measures is much higher.
“It not just EUR 76 million. It is additional funds to EUR 50 million, an amount previously allocated in this program. EBRD has provided additional funds in the amount of EUR 100 million as support for ESM liquidity, Law therefore expected to be adopted by the Parliament this week. It is a loan under favourable terms and conditions intended for preserving ESM’s liquidity, funds otherwise supposed to be allocated from the Budget, which would have implied additional 1% deficit of GDP. Discussions with EIB are ongoing for additional EUR 100 million as loans under favourable terms and conditions for the businesses and investments in energy efficiency and green transition”, Besimi said.
The Minister pointed out that resources for financing the Supplementary Budget are provided and will be executed as projected therein. As he emphasized, in addition to the funds being negotiated with the IMF, other instruments for financing both on the national and the international financial markets are also being considered.
“Negotiations with the IMF are ongoing. Such negotiations usually take months. However, we also undertake activities pertaining to other instruments, such as the Eurobond. The objective is to provide for the financing at an average interest rate below the interest rate on the international financial markets, which is above 7% at the moment. We also take the maturity into account. We are considering several options. We are not considering just a single instrument. Several instruments and portfolios are taken account of so as to ease the burden on the Budget”, Besimi said, adding that the attention is turned to foreign investors and international financial institutions since our strategy is to inject more foreign currency in the economy, thus helping inject additional financial resources in our economy, relax the monetary policy and stabilize the expectations, at the same time mitigating the effect, i.e. the upward trend of the interest rates which might lead to economic growth stagnation.
Minister Besimi said that our country is in a favourable position in terms of ensuring funds on the markets and, according to the signals sent, interest is shown in our bonds, however, considering the high yields, the most optimal way of financing is still sought for.
According to him, additional signal for the investors is the start of the opening phase of the accession negotiations with the EU.
In his interview, the Minister emphasized that the energy crisis is to be taken seriously. He pointed out the adopted conclusions on energy saving by the central government institutions, as well as the recommendations made for energy saving for the local institutions, also calling the citizens to act accordingly. As he said, this is not to frighten the citizens, but rather for them to recognize the severity of the situation caused by the crisis.