Macedonia is one of the European countries which debt increased the least in the last five years. In absolute numbers, from 2009 to 2013, the country borrowed EUR 1.1 billion in the forms of loans, while last year alone EUR 256 million was repaid. Out of all European countries, only Estonia borrowed less than Macedonia. During the crisis, debt of the largest European economies, the Great Britain, France, Spain, Germany, Italy, increased the most.
As a percentage of GDP, Macedonia again remains within the limits of low to moderate indebted countries and this is the only manner to measure the debt, Minister of Finance, Zoran Stavreski, stated for ekonomski.mk.
“Each expert analysis of indebtedness of the country means that government debt should be analyzed in relation to GDP, because while debt increases, gross domestic product of the country increases too. As percentage of GDP, government debt of the Republic of Macedonia accounts for 34.3% today and it is much lower than, let’s say in 2005, as the last year when the present opposition was in power. Government debt accounted for 38.4% than. Compared to this, current government debt is by four percentage points lower”, Minister Stavreski said.
Macedonia is the fourth least indebted country in Europe
Macedonia, with a debt accounting for 34.3% of GDP, is the fourth least indebted country in Europe, showing that the country borrowed less, compared to the other countries, in the past five to six years.
“We have been cautious with the borrowing and that is why we have low level of indebtedness, which has also been confirmed by many relevant international institutions, such as IMF, the World Bank and other. These are facts, everything else is day-to-day politics. We should be aware that Macedonia is a small country, with a relatively low level of GDP, and that is why we should be cautious for the debt to remain at the current level or at the level of moderate indebtedness. I am confident that with the projections we at the Ministry of Finance have for the coming medium-term period, accompanied by gradual reduction of the budget deficit and borrowing aimed at well-targeted projects, we will maintain this low level of indebtedness”, Stavreski said.
Funds are used for realization of projects that have improved the life of the citizens
What was achieved with the loan funds is as much important as the debt level, Stavreski said for ekonomski.mk. Effects have been significant, contributing to improved life of citizens. Stavreski pointed out – many small projects have been realized with funds from the World Bank, such as streets in Gorce Petrov, Kocani, Kicevo, bridge in Bosilovo, water supply network and sewerage in Vasilevo, new schools in Gazi Baba and Butel, all these projects being of relevance for the local population.
Major projects have been also realized with the loans. Reconstruction of Corridor X Railway started, construction of railroad tracks to Bulgaria will also commence, the decades-long problem in the water supply in Kavadarci was solved, and equipment for the railways was procured. In the past period, new equipment for health institutions was procured, construction of both the new Clinical Center in Skopje and the new Clinical Hospital in Stip will start. Many sports halls in Macedonian schools, in which the children can practice sport have been built. All these projects are important for the citizens, Stavreski underlined.
Regional and local roads contributed for connecting rural with local areas, and all these activities will be crowned with the construction of highways from Stip to Skopje and from Kicevo to Ohrid as the first segment in the construction of new highways. It is a matter of specific and well-sustained projects which will improve the life of the citizens, Stavreski said.
In parallel to the realization of important project, debts are regularly settled. Last year, Macedonia repaid EUR 256 million towards abroad. Previous Eurobond is also included in this amount. This means that at all times borrowing is aimed at well-targeted projects and, hence, the debt is maintained at low to moderate level, Minister Stavreski said for ekonomski.mk.
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