16th July 2018, Skopje – Budget revenues in 2017 increased by 6.1% compared to last year, while budget deficit is by EUR 27.8 million lower than the projected one. After the Government came in power in the middle of 2017, Supplementary Budget was made, under which cuts were made, being related to advertisements, travel costs and entertainment expenses, whereby funds were allocated for increasing the minimum wage, resolving the issue of the redundant workers, more funds were allocated for the small- and medium-sized enterprises, as well as for the active employment measures, Minister of Finance Dragan Tevdovski said, when presenting the 2017 Budget Annual Report to the Financing and Budget Commission in the Assembly.

As Minister of Finance underlined, during 2017, the fiscal system underwent crucial changes.

– The public has much greater access to the public finance-related data since last year. As a result of the improved fiscal transparency, citizens have greater control over how the public funds are spent. Reports on execution of the Budget and the municipal budgets are published, which were not previously available to the public. For the first time, Citizens’ Budget has been published for the 2017 Supplementary Budget, whereby I would like to stress that a Citizens’ Budget was prepared for the 2018 Budget as well. Budget users, municipalities and public enterprises were obliged, by law, to publish the financial reports on their websites – Minister of Finance said, adding that the fiscal transparency-related progress was also noted in the conclusion from the meeting of the Ministers of Foreign Affairs of the EU Member States.

As regards the macroeconomic performance for last year, Tevdovski pointed out that the economic activity in the first half of 2017, dropped by 0.7%, followed by movement of the economic growth to the positive zone, accounting for 0.7% in the second half of the year. Tevdovski said that the consumption, in line with the expectations, remained resilient to the political developments in the country, surging by 2%. Export of goods and services continued to grow with stronger intensity, and compared to the previous year, it picked up by 9.2% in real terms. Import also grew by 7.3%, being mainly a result of the import of intermediary goods.

-Favourable developments on the labour market continued in 2017, with somewhat stronger intensity than the expectations. Number of employed persons in 2017 increased by 2.4% compared to 2016, by which the average employment rate reached 44.1%, while unemployment rate decreased to 22.4%. Average gross wage in 2017 experienced 2.6% growth, as a result of the minimum wage increase – Tevdovski said.

As Minister of Finance underlined, in relation to the 2017 Budget execution, total revenues increased by 6.1% compared to last year. Compared to 2016, the performance of revenues on the basis of value added tax was higher by 4.2%, i.e. by Denar 1.921 billion. Collection of profit tax was also improved, whereby profit tax revenues were higher by 5.4% compared to 2016. Total expenditures of the Budget of the Republic of Macedonia amounted to Denar 196.6 billion, being lower performance by 96.7% in relation to the projected funds.

-Capital expenditures were executed at historically the highest level, amounting to Denar 19.8 billion, i.e. 85% in relation to the projections, being higher by Denar 2.9 billion compared their execution in 2016, whereby IPA funded projects were successfully implemented. As regards the capital projects, major infrastructure projects in the field of utility infrastructure were implemented, pertaining to wastewater treatment stations in Radovis, Strumica, Kicevo, Prilep, as well as rehabilitation of the sewage networks in Berovo and Kumanovo, completion of the Project for Construction of New Motorway Section Demir Kapija – Smokvica as part of Pan-European Corridor X, renewal and reconstruction of the railway infrastructure, investments in the field of energy, education, health and child protection – Tevdovski said.

Budget deficit accounted for 2.7% of GDP, being lower by Denar 1.7 billion than the projected one.

Minister of Finance Tevdovski stressed that there are upcoming significant reforms in the public finance system envisaged under the Public Financial Reform Programme.

– Significant challenges are ahead of us – important reforms, such as the medium-term budgeting, the new public procurement system, Fiscal Council, new law on public debt, all these being envisaged in the respective Public Financial Reform Programme. Implementation of the reforms will provide for a much better public finance management system. In Autumn, we will introduce the Open Finance Platform, by which the citizens will have insight into all payments through the Treasury’s Account – Tevdovski said, pointing out that the Government remains committed to implementing reforms, which will improve the public finance management, thus providing for better living standard for the citizens.

 

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