19th October 2022, Skopje – “Savings worth around EUR 40 million per year were made by providing funds at interests lower than those on the global capital market. Actions we take are cost-effective, thus being able to finance the deficit with a lower interest. Next year’s budget deficit is projected to be lower, with the new Organic Budge Law stipulating stringent fiscal rules, as per which the budget deficit should account for up to 3%”, Deputy Minister of Finance, Filip Nikoloski pointed out at the ninth Erste Investors’ Forum.
“This is a tough year. From the aspect of Budget financing, what was of great significance was not only the source and the time frame but rather and, above all, the costs for making the borrowing. We closely monitored the developments on the financial market and deliberately decided not to issue Eurobond, with the price thereof accounting for 8% both in spring and at present. As an alternative, we provided funds, the average interest of which accounts for approximately 3.5% percentage points, being a deference of 4.5 p.p., Nikoloski said.
All this is coupled by the funds provided under the IMF Precautionary and Liquidity Line amounting to EUR 530 million, Sparkasse Bank credit amounting to EUR 50 million, with an interest of 1.15% and 12-month EURIBOR, German registered notes from Deutsche Bank, amounting to EUR 250 million, at an interest rate of 3.75% and 6-month EURIBOR, as well as funds from the issuance of government securities on the domestic market.
At the panel-discussion, tilted “Economic and Market Outlook: Recurrence of the 1970s crisis”, within Erste Investors’ Forum, he stressed the significance of the new Organic Budget Law, introducing strict rules about the amount of the budget deficit and the general government debt, as noted in the most recent EC Progress Report.
Organic Budget Law also contains provisions for establishing independent body, i.e. the Fiscal Council, which will monitor the harmonization with the fiscal rules. Its establishment will provide for independent and professional analyses and views on the macroeconomic and fiscal assumptions, the Fiscal Strategy, the Budget, the Budget execution reports, the fiscal risks, and similar. To the end of increasing the Government’s accountability, statement on fiscal policy is introduced, which is to include guidelines for the fiscal strategy during the Government’s term. In addition, Integrated Financial Management Information System – IFMIS, being under implementation, will ensure better planning and monitoring of budget revenue performance and budget expenditure execution, as well as their control”, Nikoloski emphasized.
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