2nd October 2024, Skopje – Ministry of Finance prepared whereas the Government, at its last session, adopted the 2025-2029 Fiscal Strategy and 2025-2027 Public Debt Management Strategy with prospects until 2029. They present strategic documents outlining the medium-term course of the fiscal policy.
„Such medium-term planning allows for greater predictability and transparency in the policy making process. As per the adopted Strategy, the fiscal policy is focused on improving the macroeconomic stability and supporting the economic activity. This will be accomplished through gradual fiscal consolidation, improving public finance management and maintaining high-level of capital expenditures. At the same time, the economy will be supported in continuation by investments in infrastructure projects, redesigning the structure of public finances, where high level of capital expenditures and strengthening of both transparency and accountability will predominate”, Minister of Finance, Gordana Dimitrieska-Kochoska said, thereby adding that special focus will be placed on decreased informal economy and higher budget revenue collection.
In medium term, the fiscal policy projects a gradual fiscal consolidation, with budget deficit being reduced as a percentage share of GDP. Actions will be taken, pertaining to fiscal consolidation, all to the end of attaining moderate level of indebtedness.
In fact, the adopted Public Debt Management Strategy, sets the medium-term frame as regards Government’s actions in support of country’s prudent public debt management, while accomplishing the public debt management policy objectives in view of financing government needs with the lowest potential costs, risk monitoring and management, developing and maintaining efficient domestic financial market.
In order to keep sustainable level of public debt, without disrupting the fiscal sustainability, the limit on the total public debt level in medium and long run are being set under the Strategy. Thus, according to the projections, public debt will reach 66.4% by the end of 2024, to be followed by its gradual reduction in the coming years as a result of the gradual fiscal consolidation with the set limit of below 60% of GDP in 2029. Likewise, for the purpose of decreasing the risk related to the amount of issued guarantees, a limit of issued guarantees has been set, with the emphasis being placed on self-sustainable and revenue-generating projects, supporting economic growth and allowing for greater competitiveness of the domestic economy in the medium term.
In line with the Strategy, the main objective of public debt management is to ensure that government financing needs and liabilities are covered with lowest costs. Thereby, one of the main objectives with respect to public debt management is to provide for development of the domestic government securities market, thus creating conditions for reducing the debt refinancing risk, ensuring both resistance to external shocks and long-term debt sustainability.
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