8th November 2023, Skopje – The new Organic Budget Law, providing for introduction of fiscal rules and a Fiscal Council, as well as a medium-term budget framework, significantly strengthen the fiscal sustainability, as per the European Commission’s Report on our country. As pointed out by the European Commission, the medium-term fiscal consolidation, which the Ministry of Finance projected in the 2023-2027 Fiscal Strategy is reflected in the 2023 Budget, supported by a rules-based budget framework under the new Organic Budget Law. Last year’s budget deficit is lower than projected, whereby public debt is reduced. It is also noted that Ministry of Finance contentiously improves public finance transparency,
as well as that preparations have advanced in executing the new Organic Budget Law by setting up an independent Fiscal Council to monitor compliance with the rules and verify macro-fiscal projections, as well as the medium-term fiscal framework in line with the Fiscal Strategy. Last year, preparatory activities were commenced, pertaining to bylaws, which will provide for full execution of the Organic Budget Law, also including the setting of numerical fiscal rules. Activities are being undertaken in the Ministry of Finance, aimed at setting up a separate public investment management unit.
European Commission staff also points out that Ministry of Finance continues to increase transparency by publishing data on revenues and expenditures of public institutions, municipalities and state enterprises of quarterly level. Emphasis is also put on the need to take actions for strengthening MoF’s human resources and capacities, in particular those related to budget processes, as well as that Ministry of Finance should additional increase public expenditure efficiency and transparency in line with the new Organic Budget Law.
Level of implementation of the Economic Reform Program (ERP) has improved, particularly as a result of the macro-fiscal progress. Focus should be also placed on the structural reforms, identifying the challenges, in particular climate transition and enhancing the capacities of public institutions so as to be able to respond to the challenges related to energy crisis.