11th August 2024, Skopje – In a short period of time and considering the circumstances we have encountered, the Supplementary Budget reflects our efforts to do the very best. Fund are provided for settlement of all liabilities incurred by law. Settlement of liabilities under issued guarantees on the basis loans extended to certain public enterprises unable to repay them, put great pressure on the Budget, Minister of Finance, Gordana Dimitrieska-Kochoska, underlined in her guest appearance in the evening news on MRT TV channel.
“Funds are provided under the Supplementary Budget for all liabilities incurred pursuant to law and the respective legal amendments, as well as the arrears which, although due, have not at all been reported in the MoF’s Electronic System for Reporting and Recording of Liabilities. Thereby, priority is given to settling all liabilities incurred by law. Some of the arrears undergo revision, with the payments to be made as per the analyses conducted. We are in a phase where expenditures need to match the revenues collected, all to the end of not additionally broadening the budget deficit, which has already been increased by EUR 181 million,” the Minister said.
She also said that settlement of liabilities under issued guarantees, which affect the investment implementation, have a considerable impact.
“Settlement of liabilities under issued guarantees has a considerable impact on the Budget, because, due to corruption and criminal activities, some enterprises collapsed and the state Budget is to bear the burden therefor. Instead of providing EUR 100 million investments in the health sector, the education sector, etc., we are settling liabilities under issued guarantees, i.e. repaying loans extended to public enterprises unable to repay them. For instance, we have settled liabilities worth EUR 90 million this year for PESR alone. If this enterprise was able to repay only one instalment last year, this year it not able to repay any instalment”, Dimitrieska-Kochoska underlined, explaining that such situation occurs in times when the Budget is in a bad shape and the country has to provide, as a last resort, funds to repay the loans.
As regards the announced liner increase of pensions, she believes the pensioners deserve it. If a pensioner, receiving Denar 13,000 pension, is given additional Denar 5,000, you are giving him money to survive, considering the rising costs. We are just changing the methodology, thus focusing on those receiving lower pensions to receive higher amounts and hence reduce the gap between the lowest and the highest pensions”, Minister Dimitrieska-Kochoska said.
Bilateral loan from Hungary puts no additional pressure on the Budget, since, as she said, the previous Government envisaged the amount of EUR 500 million. “What we are doing is providing a cheaper alternative to address foreign borrowing, i.e. if we were to issue a Eurobond, we would have had to pay an interest of over 6%, whereas the interest to be paid under this loan is 3.25%.”, the Minister said.
During her interview, she pointed out that public debt can be sustainable by tackling informal economy, with the way the borrowed funds are spent, i.e. whether they are intended for investment, being a crucial aspect thereof. “When funds are used for making investments adding value to the overall economy, the result at a given moment would be a higher public debt. What the money is spent for is crucial. In the past, money ended up in private consumption, and that is why GDP experienced no growth. Gross investments are at a very low level, leading to a poor economic situation”, Minister Gordana Dimitrieska-Kochoska said.
