17th July 2024, Skopje – Denar 31 billion is being provided with the Draft 2024 Supplementary Budget, adopted late last night at Government session. Under the Supplementary Budget, necessary funds are envisaged for settlement of both arrears and liabilities incurred pursuant to law, having not been planned under the 2024 Budget. At today’s press conference, Minister of Finance, Gordana Dimitrieska-Kochoska, elaborated on the adopted amendments.
“2024 Supplementary Budget opened up many issues, and brought about many unexpected surprises. The Budget’s poor condition surpassed even our own expectations. We encountered a reality suggesting a state in chaos and debts. A wish-list Budget rather than a development-based one. Excessive payments. Economy in state of cardiac arrest. Therefore, when preparing the Supplementary Budget, following assumptions were taken as a starting point – amount of funds that could be re-allocated within the existing Budget out of items recording poor execution, planning funds which, although required under the law, were not projected, as well as arrears to be settled towards citizens and businesses. By drafting this Supplementary Budget, the new Government’s goal is to improve the conditions for a vast number of citizens and business community, including the farmer, the youth, the adult and the sport population and the likes”, the Minister of Finance said.
Under the Supplementary Budget, total revenues are projected in the amount of Denar 318,150 billion, recording an increase of 2.6% by way of higher collection of contribution – based revenues resulting from increased wages in certain public institutions, as well as expectations of wage growth in the private sector.
Total expenditures are projected in the amount of Denar 362,816 billion, recording growth of 5.6% compared to the initial ones. Based on such revenue and expenditure projections, the budget deficit is projected to Denar 44.7 billion, i.e. 4.9% of GDP.
“Exception from the budget deficit fiscal rule is due, above all, to the necessity of providing funds indispensable for smooth functioning of institutions and servicing of liabilities. Approximately Denar 20 billion is provided by reallocation from different items, such as goods and services at all users and capital expenditures. Additional Denar 11 billion is provided to settle the arrears, as well as liabilities incurred pursuant to law, not being projected”, Dimitrieska-Kochoska underscored, adding that the budget deficit of Denar 7 billion has been unrealistically presented in the initial 2023 Budget, taking into consideration that December pensions were paid in January 2024.
Under the Supplementary Budget, as the Minister indicated, Denar 4.1 billion is projected for wage payments, with Denar 5 billion being projected for payment of pensions, Denar 600 million under court rulings, Denar 1 billion for TIDZ financial support, Denar 644 million for students’ meals and scholarships, Denar 1.7 billion for health insurance, sick leave and other arrears, Denar 1.7 billion for agricultural subsidies, Denar 550 million for sports vouchers, Denar 80 million for the Education Development Bureau, Denar 1.3 billion for VAT refund via the “My VAT” measure, as well as Denar 132 million as penalties towards EU Funds due to detected irregularities.
Denar 6 billion is also provided for capital investments in municipalities, as well as funds for the State Election Committee for the election process.
Per Minister’s opinion, the greatest fiscal risk is settlement of liabilities under issued guarantees for loans extended to the state and the public enterprises, as well the respective interest.
“Denar 5.1 billion was needed for servicing guaranteed loans towards International Financial Institutions on the behalf of SOEs and public enterprises. Due to the wasteful operations of these enterprises, the citizens are once again to bear the burden, requiring accountability to be sought therefore. Additional Denar 822 million is provided for interest due to the increase of the Euribor – pegged interest”, the Minister stated, adding that interest in the amount of Denar 1.8 billion falls due by 2028.
At the press conference, the Minister shared that it is incomprehensible how certain institutions hold almost Denar 14 billion in their own accounts, and it is high time that institutions are to realize that they are performing public service, spending people’s money which are to be used cost-effectively, all to the end of lessening the burden on the budget.
“Instead, loans are being taken, the annual interest on which amounts to almost EUR 13 million, so I believe that each institution should thoroughly analyze their respective laws which regulate the managing of their own accounts, and use the funds for current or capital expenditures, all to the end of alleviating the burden on the budget. At present, these funds are lying idle in the accounts to no positive effect at all, as opposed to the adverse one of creating expenses. We must understand that we are all to work to the interest of the citizens since it is people’s money after all,” Dimitrieska-Kochoska said.
She is confident that despite all the challenges the Supplementary Budget faces, 2025 Budget is to bring about new hope, a much improved and cost-effective planning and implementation of projects to their full effect, thus adding value to the whole economy, and brining both tangible benefits to the citizens and the business community and improved living standards.
Draft 2024 Supplementary Budget adopted by the Government is to be presented before the Parliament.
