3rd November 2022, Skopje – Budget proposed for a third year in a row in times of crisis. Budget aimed at coping with the crisis with EUR 250 million being allocated thereof, development budget for capital investments amounting to EUR 795 million, while carrying out fiscal consolidation at the same time.
This was pointed out by Minister of Finance, Fatmir Besimi during his guest appearance on “Top Tema” TV Show, stressing that the specific features of this Budget is the continued fiscal consolidation trend, meaning fiscally sustainable financial framework, which gives clear signal to investors that despite the crisis, there are ongoing activities aimed at stabilizing the public finance balance, i.e. the budget deficit and the public debt.
“If observed in nominal terms, the budget deficit, under this Budget, remains to be EUR 695 million as in 2022, however, in percentage terms as regards GDP, the deficit is to reduce from 5.3% this year to 4.6% of GDP next year. For comparison purposes, in 2022, it accounted for 8.1% of GDP, in 2021, even though it was projected at 6.1%, the budget deficit accounted for 5.5%, while in 2022, although 4.3% budget deficit was projected, due to the considerable impact of the energy crisis, 5.3% budget deficit of GDP was projected under the Supplementary Budget”, Minister explained.
He went on that it should be taken into account that despite the global crisis, which is of major proportions, we managed to carry out fiscal consolidation.
“My duty, as a Minister of Finance, is to propose a budget, which from macro-financial and fiscal aspect, is sustainable in the medium term. We are carrying out fiscal consolidation even in times of crisis. As for the other budget positions, the expenditures will not exceed the revenues, all to the end of avoiding unnecessary excessive borrowing. Thereby, more ambitious capital expenditure dynamics has been foreseen under the Budget”, Minister underlined, thereby adding that what is of crucial significance is that the capital expenditures are projected above the deficit level, while introducing mechanisms and indicators for their higher execution thereunder.
Minister stressed that the 2023 Budget is the first budget, proposed in line with the new Organic Budget Law, introducing fiscal rules, which, among other things, pertain to the level of the budget deficit and the public debt.
As he said, due to the crisis and the actions aimed at coping with the effects therefrom, public debt picked up by 10% in 2020, reaching 61%, however, in the period afterwards, via the implemented policies, it was reduced, currently accounting for less than 55.7% of GDP.
Savings plan covering all institutions is also among the additional fiscal consolidation measures, i.e. as per the projected higher funds for electricity, the other next year’s budget positions such as per diems and travel costs, furniture, vehicles and similar, have been reduced.
As Minister said, the 2023 Budget covers funds for minimum wage growth, which is to realized as per the determined methodology, thereby pointing out that the public administration wages will not be decreased, but that a new methodology for harmonizing all wages with the minimum one is rather prepared, for which there are ongoing negotiations, to be followed by the respective legal changes thereof.
During his interview, he announced that the final decision regarding the commenced tax reform process will be announced soon. Thereby he emphasized that the solution to be be offered will not be detrimental for the economy since ensuring fair taxation and a tax system that will underpin economic growth, is the aspirational goal.