22nd March 2020, Skopje – Ensuring the provision of sufficient budget funds in every scenario, as well as providing liquidity and financial injection into the economy through measures for assistance to companies are the current priorities, Minister of Finance Nina Angelovska said at a press conference financing the budget in conditions of corona crisis. Minister of Finance announced that plan is to withdraw EUR 400 million as favorable funds through the bridging instrument, EUR 87 million from the IMF funds, as World Bank’s Emergency Development Policy Grants, wherefrom, around EUR 100 million is expected to be withdrawn.
– We need to immediately provide funds! We considered all possibilities and options at our disposal, we assessed all risks and we chose the most optimal plan. At yesterday’s session, the proposal was submitted to the Government, being adopted thereby. Taking into account the Eurobond issuance is a long process lasting for more than 2 months, that the unpredictability is high on the capital market, as well as that there was a pre-election period due to which we could not start this process earlier, as regards the financing, Ministry of Finance proposed to use bridge to bond facility in the amount of EUR 400 million with a maturity of up to 12 months, which will support the country’s liquidity during the pandemia and the reduced economic activity, the needs in all the health sector, as well as the economy. This loan as its name bridge to bond facility implies, will be fully repaid with funds when the Eurobond is issued. It is a matter of loan from foreign banks under favourable conditions. We expect a favorable interest rate on this instrument, even lower than the previously issued 2018 Eurobond, having historically the lowest interest rate of 2.75%. Angelovska said.
Angelovska underlined that new measures will be soon announced, as higher liquidity would be provided soon, and thus greater financial room for undertaking major measures.
– As Minister of Finance takes care to prevent the spread and no patient to have to use a respiratory machine, thus the purpose of the economic team is to protect the budget’s liquidity and protect every single job and every citizen. The first package we came up with was characterized as insufficient, and some people criticized the timing. To make the corona shock situation affecting the worldwide countries, even more difficult to manage, we faced conditions of technical government and announced elections when our hands were tied for almost all the things that needed to be done. Thus, without providing additional funds and liquidity, proposing aggressive measures would be unserious in conditions of uncertainty about the feasibility for their implementation. Many of the measures as you know require legislative changes that were not possible before the state of emergency was declared – Angelovska said.
Angelovska expects for the larges effects of corona crisis to be felt in the next three months, whereby decelerate economic activity and even negative growth rate is expected in the second quarter. Improvement is already expected in the third quarter, but this will not contribute to drastic recovery for certain sectors. The fourth quarter is the one that is projected for rebound, i.e. positive turnaround and recovery. As I said at the beginning, the Government is here for the companies, since they are the ones creating jobs and producing new values. Our priority will be for our companies to survive and keep their jobs. The new measures to be presented are aimed thereto.