17th March 2019, Skopje – Wage increase policy is Government’s priority. Therefore, the Government undertakes series of measures to increase wages, including the increase of minimum wage, as well as introduction of legal mechanism for its regular indexation, said Minister of Finance, Dragan Tevdovski in an interview for Radio Free Europe. He underlined that in addition to wage increase, productivity and employment also increased.
-Main priority of the Government is for the wages to rise, since the living standard of majority of the citizens, having no income from capital, depends on their wages. Wage increase leads to higher living standard. Minimum wage increase has contributed to significant rise of the lowest wages, as well as for movement of the wage spiral – meaning that wages higher than the minimum one have started to rise. For me as an economist, this is important, because it has driven productivity as well. A worker better paid is a worker contributing more, Tevdovski said.
He pointed out that the legal solution for minimum wage has set the mechanism for its regular indexation, depending on the growth of average wage, gross domestic product and price increase.
-Ministry of Labour and Social Policy has announced that minimum gross wage will increase by around Denar 600. Wages continue to rise. We need to discuss with the employers, since there is room for additional increase of the minimum wage, Minister of Finance said.
As regards GDP growth, Tevdovski said that broad-based growth was of key importance, i.e. it was observed in most of the sectors and was not due to government intervention, like it used to be.
-Now, private sector drives the growth in several segments. For instance, growth is observed in manufacturing, services, trade, construction sector – growth in the fourth quarter was around 19%. Household consumption also grew, as a result of the increase in the number of employees, as well as the wage increase, which was the highest last year compared to the last nine years. FDIs amount to EUR 624.5 million, almost three times higher compared to the average in the previous eight years. One of the most important indicators that economy is on the right track is unemployment reduction. It dropped below 20% for the first time since the country’s independence. In 2018, employment increased by around 20,000 persons on annual basis. Unemployment reduction and wage increase contribute to better living standard, Tevdovski said.
As regards public debt, Tevdovski said that is was stabilized and, unlike before, no funds were spend on projects on weeping willows, monuments and facades.
-Public debt increased from 23% of GDP in 2008 to 48.8% of GDP at the end of 2016. At the end of 2018, it accounted for 48.7% of GDP, Tevdovski said, underlining that interest rates on debt servicing dropped as a result of increased investors’ confidence. He also added that around EUR 880 million fall due to be repaid in 2020 and 2021 on the basis of the debts incurred by the previous government, an amount this Government reduced by Eurobond buyback.
With respect to capital investments, Minister of Finance said that, unlike the previous year, Public Enterprise for State Roads, which is not within the Budget, showed excellent realization, experiencing three-fold increase. He also said that Ministry of Finance showed excellent realization as regards capital investments, and he was an optimist that the realization of capital investment would be close to the planned one by the end of the year.