1st July 2021, Skopje – Under the 2021 Supplementary Budget, support has been provided for the business sector, as well as additional funds for the health sector, thus providing for recovery and getting the economy back to the growth trajectory, Deputy Minister of Finance, Dimitar Kovachevski said, elaborating on the 2021 Supplementary Budget, upon which debate was commenced in the Financing and Budget Parliamentary Commission on 1st July.
– Under the Supplementary Budget, necessary funds are being provided for carrying out some of the Government’s measures, pertaining to the interest-free loans via the Development Bank, geared towards the most affected sectors in the amount of Denar 615 million, followed by the state loan guarantee via the Development Bank, amounting to Denar 300 million, establishing Fund for Supporting Export-Oriented Companies through the Development Bank, in the amount of Denar 610 million, as well as capital investments in rural development via IPARD amounting to Denar 500 million, Kovachevski said.
In the field of health, as he stressed, Denar 123 million has been allocated for reconstruction of public health institutions, whereby additional funds have been projected in the amount of Denar 790 million, intended for purchasing medical equipment and constriction and installation of modular hospitals. Additional funds have been provided for activities, directly contributing to the fight against the health crisis, pertaining to the procurement of pharmaceuticals and vaccines for immunization of the population.
Under the Supplementary Budget, additional Denar 3 billion has been provided for the agriculture sector. It is worth mentioning that the environment protection is being strengthened via the new green development programme, in the amount of Demar 685 million.
At the same time, funds under the Supplementary Budget have been projected for investments in sports facilities in the amount of Denar 90 million via the Agency for Youth and Sport, as well as construction of kindergartens and social centers in the amount of Denar 55 million through the Ministry of Labour and Social Policy.
Kovachevski, by elaborating on the 2021 Supplementary Budget, stressed that the fiscal stimulus for the business sector and the citizens continues as long as the economy fully recovers and gets back to the growth trajectory. Thereby, as he said, we remain committed to making investments in durable consumer goods, focusing on the implementation of capital infrastructure projects in the field of road, railway, energy and utilities infrastructure, as well as capital investments aimed at improving the conditions in the health, education and social sectors, agriculture and environment protection.
According to the amendments and modifications to the 2021 Budget of the Republic of North Macedonia, total revenues are projected at Denar 222.6 billion, amounting to around Denar 10 billion or by 4.7% higher in relation to the initial Budget projections.
In the period January- May 2021, as Kovachevski said, total revenues were collected in the amount of Denar 83.6 billion, accounting for 39.3% in relation to the 2021 projections, increasing by 13.9% or Denar 10.2 billion in absolute terms, compared to the same period last year.
Total expenditures are projected at Denar 268.8 billion or by 8.6% or around Denar 21. billion higher compared to the projections.
Under the projected revenues and expenditures, deficit is forecast in the amount of Denar 46.2 billion, i.e. 6.5% of GDP. Changes in the deficit (increased deficit from 4.9% to 6.5% in relation to GDP) are a result of the need for increased financing intended for the set of the economic measures adopted by the Government of the Republic of Macedonia, being geared towards coping with the consequences of the health and the economic crisis, which will be financed via the category subsidies and transfers, as well as with capital expenditures.
– Economy is expected to recover in 2021, whereby growth is projected at 4.1%, as it was under the initial Budget. Thereby, investments will play a crucial role in the economic recovery and its gradual intensification. Real gross investment growth is projected at 8% in 2021, with both private and public investment expected to contribute positively. Consumption is also envisaged to support the domestic demand growth. Private consumption is expected to increase by 4% in real terms, while public consumption growth is projected at 4.3%. Export is expected to grow by 10.6%, while import is projected to increase by 11% in real terms. Number of employed is projected to increase by 1%, which will contribute for the average employment rate to increase to 47.5% and bring the unemployment rate down to 15.8%, he said.
Inflation rate in 2021 is projected at 2.1%, which represents a certain intensification of inflation compared to 2020 and has been revised upwards compared to the initial projection (1.5%), amid upward revision of the commodity prices projected growth on world markets, such as oil and food products, and upward movement of foreign effective inflation.
Kovacevski assessed that the 2021 Draft Supplementary Budget deserves a constructive discussion based upon arguments, mutual respect, which is also expected to be supported by all MPs in the Parliament of the Republic of North Macedonia.