29th October 2021, Skopje – As of Q3 inclusive, public debt is reduced below 60% of GDP, as set under the EU Maastricht criteria, thus accounting for 59.3% of GDP. This speaks of well set fiscal policy and good public finance management even in times of pandemic.
Public debt dropped by 3.8 p.p. compared to Q2 2021, i.e. from 63.1% as it accounted for as of Q2 inclusive.
According to the Ministry of Finance data announced today, public debt amounts to EUR 6,950.7 million, while it amounted to EUR 7,386.8 million on 30th June 2021.
Debt reduction is, above all, a result of repayment of the Eurobond issued in 2014, amounting to EUR 500 million. It is important that, despite the recession, the Government successfully launched new issuance of Eurobond on the global capital market in March 2021, with a historic low interest rate of 1.625%, the funds therefrom being used for the repayment of 2014 Eurobond.
Ministry of Finance is strongly committed to stabilizing the debt and its positioning below 60% of GDP as per the Maastricht criteria.
On the medium term, i.e. by 2026, according to the projections set in the Public Debt Management Strategy, public debt will stabilize and will be reduced to 57.7%, while government debt will be reduced to 50.7%.
This will be achieved through the Fiscal Sustainability Plan as well, which provides for gradual narrowing of the total budget deficit from 4.9% in 2021 to 2.2% in 2026, by strengthening the budget revenue collection, reducing and restructuring the budget expenditures and changing the sources of financing the budget deficit. All of this is geared towards accelerated economic growth which, according to the adopted Growth Acceleration Plan, in the next five years, should contribute to double the GDP growth rate compared to the average in the past 10 years, with economic growth rates from 2.5% average growth to above 5% annual growth by 2026, as well as investments estimated in the amount of EUR 12 billion. What is important is that publicly funded investments, in the amount of EUR 4 billion, will mobilize additional EUR 8 billion invested by the private sector. The established concept does not generate any additional borrowing or tax burden on the citizens.
COVID-19 induced crisis and coping with its consequences have imposed the need to ensure additional funds for health sector measures and support to the economy and the citizens, which increased the debt in almost all countries, including our country. Proper policies and timely measures, more than EUR 1 billion being allocated therefore, have demonstrated that the country manages the crisis, ensuring fiscal consolidation thereby. At the end of 2020, public debt accounted for 60.2%, it accounted for 61.2% in Q1 2021 and 63.1% in Q2, dropping to 59.3% at the end of Q3.
Ministry of Finance publishes the data on public debt in a transparent manner on its website on quarterly basis. Within the Fiscal Counter, the Ministry publishes monthly data on the government debt amount.