25th October 2024, Skopje – Improving and preserving macroeconomic stability, supporting economic activity and accelerating economic growth are the major goals of the fiscal policy this Government pursues. Stabilization process has already commenced under the adopted 2024 Supplementary Budget, keeping the practice of disciplined budget spending, gradual fiscal consolidation, reduction of both budget deficit and public debt, all this coupled by increased revenue collection efficiency. This was concluded at the meetings held between Minister of Finance, Gordana Dimitrieska-Kochoska, Director of the European Department at IMF, Alfred Kammer, IMF Executive Director, Paul Hilbers, Alternate Executive Director, Luc Dresse, as well as Jeroen Clicq and Marnix van Rij, who are to stand in as the new IMF Executive Director and Alternate Director, respectively.
“Upon taking office in the month of July, 2024 Supplementary Budget was prepared, aimed at stabilizing the public finances and repaying the liabilities prescribed by law, as well as settling the arrears. Fiscal consolidation is a process already incorporated in the Supplementary Budget, i.e. non-productive expenditures are being cut, which will be resumed along with disciplined budget spending in the upcoming period as well, which will result in reducing the budget deficit and the public debt. On the other hand, budget revenue collection will be improved by increasing the collection efficiency particularly as regards informal economy”, Minister of Finance pointed out.
She underlined that this is the way of gradually accomplishing the set fiscal rules, as per which budget deficit should account for up to 3% of GDP and public debt should not exceed 60% of GDP. “Fiscal Strategy was adopted, by outlining the budget deficit trajectory therein. Public Debt Management Strategy was also adopted, reflecting the efforts the Ministry of Finance puts in for attaining prudent public debt management and reaching a level below 60 % by 2029. In this context, the 2025 Budget is in its final stage, whereby budget deficit is forecast to be reduced compared to the one foreseen in this year’s Supplementary Budget, which will not exceed 4% of GDP”, Dimitrieska- Kochoska pointed out.
She also stressed that in addition to the fiscal consolidation, the Government placed strong emphasis on rebounding the economy, thus, entirely new concept will be implemented, being based upon scaled-up investments in infrastructure projects, redesigned public finance structure, implying high level of capital expenditures, and increased both transparency and accountability. Moreover, as she said, economic activity will also be underpinned by the private sector by implementing a new investment cycle of over EUR 500 million.
She also emphasized the key role of the tax reform, based upon strengthened revenue collection, mostly by reducing informal economy, which will, in addition to greater revenue collection efficiency, provide for level playing field for the companies, and their boosted competitiveness.
She also highlighted that the application of the new Organic Budget Law, and the bylaws which are currently being prepared, will play a major role in implementing the planned reforms, which ultimate goal is applying the best practice when planning and executing the Budget. It is expected for the process digitalization to also produce positive benefits.
Already planned reforms will also be supported with the announced EU Growth Plan for the Western Balkans, for which, the first tranche expected to be disbursed by the end of the year, accounts for 7% of the total amount, that being around EUR 750 million. In the past period, certain reform activities were also undertaken, which implementation was in line with the IMF Precautionary and Liquidity Line (PLL), all to end of pursuing sound macroeconomic policies.
In Washington, Minister Dimitrieska-Kochoska, accompanied by the Governor of the National Bank, Anita Angelovska-Bezhoska will also meet top officials from the World Bank. Minister and Governor attend the regular IMF/WB Annual Meetings, taking place in Washington in the period 21st October- 26th October 2024.
