10th December 2021, Skopje – Construction of road infrastructure along Corridor 8 and Corridor 10, improved educational services, green transition, modernized agricultural economy, are only one part of the capital investments forecasted under the 2022 Draft Budget, being at all-time record high level, which implementation will generate higher economic growth rates.
Minister of Finance, Fatmir Besimi, by elaborating on the 2022 Budget at a plenary session in the Parliament on Friday, pointed out that the 2022 Draft State Budget reflects the economic and social policies the Government implements, being geared towards attaining the key goals set under the adopted strategic documents. Thereby, as he pointed out, this year is expected to end as per the projected 4.1% GDP growth, with a realistic possibility for exceeding this level. In 2022, economic growth in the country is expected to accelerate and reach 4.6%, amid scaled-up investments, solid consumption growth and stabilized external demand”.
“We were urged to respond to the increasing needs of the health sector, the green agenda, the digital transformation, the innovations and the technological development, the fiscal implications of the crisis, while maintaining fiscal consolidation. We have set an ambitious goal for 2022, which, in the light of the envisaged policies, is on solid basis to be reached”, Minister Besimi said.
Under 2022 Draft Budget, total expenditures are projected in the amount of Denar 272.4 billion or 35.2% of GDP, with total revenues being projected in the amount of Denar 238.9 billion or 30.9% of GDP, whereby the deficit is projected in the amount of Denar 33.5 billion or 4.3% of GDP, which will be only used as support for significant portion of capital investments, amounting to Denar 38.2 billion, while the remaining portion will be financed from own revenues.
“Simply said, the 2022 Budget will include a development component”. Budget’s development component is reflected through increased funds for capital expenditures by approximately 28.3% compared to 2021, meaning Denar 8.4 billion more have been projected for capital projects in 2022. This Draft Budget adheres to the golden rule of government spending. In 2022, capital investments will be higher that the budget deficit for the first time in the last decade, meaning borrowing will be targeted solely for investment projects. Capital expenditures in 2022 are projected at all-time record high level, accounting for 14% of total budget expenditures”, Besimi said.
As more important among them, as Minister pointed out, are Corridor 8 and Corridor 10, i.e. Tetovo – Gostivar, Trebenishta – Struga – Kjafasan, Gostivar – Bukojchani sections, to be financed with budget funds, as well as Bukojchani – Kichevo section, which will be financed with EBRD funds. Budget funds will be also used for financing the construction of Prilep – Bitola section along Corridor 10, whereby IPA funds will be geared towards implementing the projects for construction of Skopje – Blace and Gradsko – Drenovo sections.
As regards railway infrastructure, under the 2022 Draft Budget, funds are also allocated for reconstruction of railway line along Corridor 10, as well as Kumanovo – Beljakovce – Kriva Palanka section along Corridor 8. As regards gasification, construction of national gas pipelines Skopje – Tetovo section, Gostivar – Kicevo section and Sveti Nikole-Veles section, is envisaged.
Funds are also provided for investments aimed at construction and reconstruction of public health institutions, procurement of medical equipment, and reconstruction of the General Hospital in Kicevo.
To the end of supporting the agricultural sector, substantial capital investments have been envisaged, being intended for rural development, construction of hydro systems and investments aimed at boosting the competitiveness and modernizing the agricultural holdings.
To the end of green transition and better management of climate and environmental challenges, as regards the environment sector, new Green Development Program, in the amount of Denar 3.6 billion, is envisaged, which is geared towards reduction of greenhouse gas emissions, better quality of water, air and soil, as well as using new renewable energy sources.
As regards education, as Minister pointed out, Projects for Reconstruction of Student Dormitories will be commenced, coupled by the realization of the Project for Building Physical Education Facilities in Primary Schools and Rehabilitation of Primary and Secondary School, as well as Rehabilitation of Primary and Secondary Schools, to the end of improving the overall learning conditions of pupils in primary and secondary schools. For the purpose of improving the learning conditions in the primary education in the country, Primary Education Improvement Project will continue to be financed with a World Bank loan, amounting to Denar 246 million.
For the purpose of successful execution of capital expenditures, CAPEF mechanism will continue to be applied, yielding positive effects as regards this year’s execution. Thus, as Minister pointed out, since the beginning of the year, the execution of capital expenditures has been higher by Denar 6.8 billion compared to the same period last year or by 62.8% more.
At the same time, input and output indicators will be introduced, for the purpose measuring the five-year performance of the respective projects.
Amended Draft Budget incorporates the accepted amendments by both the opposition MPs and the ruling majority, in the total amount of Denar 382 million, under which among the other, funds have been provided in the amount of Denar 250 million for Emergency Fund in the Agency for Financial Support in Agriculture and Rural Development; Denar 30 million for energy efficiency at households; and the rest for other projects related to environment and local development.
“2022 Draft Budget, including a development component, will ensure uninterrupted financing of the state’s functions, as well as strong financial support for economic recovery and accelerated, inclusive and sustainable economic growth. Upcoming 2022 will be a year of further economic recovery and accelerated growth via investments, projected in the Draft Budget at historic high, funds allocated therefore being higher than the budget deficit amount for the first time ever, thereby, amid the risks related to the protracted COVID-19 pandemic, protecting the health and the lives of the citizens is crucial, with the regular payment of wages, pensions and social contributions and support to the economy as an integral part thereof”, Minister said.