4th December 2023, Skopje – 2024 Draft Budget provides conditions for sustainable economic growth, further fiscal consolidation and strengthened fiscal sustainability support of the standard of living of the citizens and the vulnerable categories of the citizens and businesses, as well as intensified convergence of the country towards the EU. This was underlined by Minister of Finance, Fatmir Besimi when elaborating on the 2024 draft Budget before the Financing and Budget Commission, being put on the agenda as of today.
By presenting the draft Budget, on behalf of the Government, the Minister stressed that the policies incorporated in the 2024 Budget, are in support of the response to the prolonged uncertainty, slowed down global economy and risks on our economy.
“Strategy on recovery, coupled by growth acceleration, is first and foremost, based upon encouraging development via solid investment cycle, with the public sector as its cornerstone, the major infrastructure projects, as well as stimulating the private sector development, which will be supported via budget policies. Ensuring a fiscal sustainability is also crucial, via continuous fiscal consolidation, while also providing for energy sustainability, as well as sustainability in the agriculture and the economy in general, by pursuing the green economy concept”, Minister pointed out.
He stressed that changing the budget structure is significant, i.e. the fact that as of last year, capital expenditures increased by twice compared to 2020 and that such tendency is maintained in 2024 Budget as well. On the other hand, as he indicated, budget deficit is reduced by almost one third compared to this year’s projections, accounting for 3.4% of GDP, which is almost half the primary deficit, i.e. 1.7% od GDP, while the other half thereof is used for paying interest on the prior accumulated debts.
In line with the draft Budget, as Besimi said, the 2024 Budget targets the priorities, by appropriately allocating funds in support of meeting the public needs of the citizens and the companies. Total revenues are projected in the amount of Denar 310.1 billion, being higher by 10% in relation to 2023, while expenditures are projected in the amount of Denar 343.6 billion, being higher by approximately 5.8% compared to 2023. According to him, such projected revenues and expenditures result in lower budget deficit compared to 2023 by around Denar 9.2 billion, being projected in the amount of Denet 33.5 billion in absolute terms or 3.4% of projected GDP. In addition to the reduced budget deficit, proper functioning of institutions, providing a development component, as well as allocating necessary funds as reserve assets in crisis situation at around 0.4% of GDP via the budget expenditures.
Budget, as it was pointed out during the presentation, provides for regular and timely performance of legal obligations, smooth implementation of the election activities, support of the national economy, the private sector and the citizens, intensified implementation of infrastructure projects, attraction of foreign investments, encouragement of the innovations of domestic companies, etc.
Under the 2024 Draft Budget, Denar 298.6 billion is projected as current expenditures, thus providing for regular payment of the wages to the public sector employees, timely and regular payment of pensions, guaranteed minimum income and other social rights, payment of agricultural subsidies, support for small- and medium-sized enterprises, support for subsidizing the innovation activities of the enterprises, as well as allocation of funds for targeted support to the vulnerable categories of citizens and businesses.
As for expenditures for payment of wages, Denar 41.2 billion is projected, being higher by 10% compared to 2023, providing for payment of increased wages of public sector employees in line with the General Collective Agreement. Expenditures related to goods and services are projected in the amount of Denar 25.3 billion, within which, Denar 1 billion is provided for carrying out the elections, with current transfers and subsidies being projected in the amount of Denar 215.3 billion, i.e. Denar 83.6 billion as payment of pensions, Denar 13.2 billion as social allowances, Denar 1.5 billion as unemployment benefit, Denar 1.9 billion for active employment policies and measures. Denar 45.7 billion are projected for healthcare, Denar 29.8 billion for transfers to local government units, as well as funds for agricultural subsidies and subsidies of the private sector.
Given the protracted uncertainty arising from the crisis, EUR 60 million is projected under the 2024 Budget as support for the vulnerable categories of citizens and businesses. In addition, funds for this purpose are provided in other programs of the ministries, such as the Energy Poverty Program in the Ministry of Economy and the Program for Guaranteed Minimum Income in the Ministry of Labor and Social Policy.
Capital expenditures are projected in the amount of Denar 45.1 billion, being intended for implementation of the already commenced infrastructure projects, i.e. investments in road, railway, energy and utilities infrastructure, as well as capital investments for improving the conditions in the field of health, education and social affairs, agriculture, culture, sports, environment and judiciary.
Economic growth is projected at 3.4% and inflation is forecasted to account for 3.6%.
Under the Financing and Budget Commission, the debate upon the draft Budget lasts for 10 working days, followed by its consideration and adoption at a plenary session in the Parliament. In line with the set deadlines, Next year’s Budget should be adopted by 31st December at the latest.