Skopje 3rd November 2012 (MIA) – Government of the Republic of Macedonia adopted 2013 Draft Budget at its session held on Friday evening.
Total revenues in the Draft Budget are projected at Denar 147 billion and 957 million, while total expenditures are projected at Denar 165 billion and 652 million, by which the Budget deficit is projected at 3.5% of the Gross Domestic Product.
– We, as a Government, believe that amid expectations of slowed down recovery of European and Macedonian economy, this level of Budget deficit is reasonable and necessary in terms of maintaining an adequate level of fiscal stimulus for Macedonian economy, taking into consideration that the 2013 Budget also includes increase in investments, pensions, social benefits and agricultural subsidies, Vice Prime Minister and Finance Minister Zoran Stavreski told at Saturday’s press conference.
2013 Budget is projected at 2% of GDP growth, 3.5% inflation and 6% Gross investments. Foreign currency reserves will remain at high level, whereas foreign exchange rate will remain stable, whereby, Stavreski pointed out, monetary and fiscal policy will be aimed at maintaining stable level of foreign exchange rate, and thus, price stability as well, which is the ultimate goal of the monetary policy.
– 2013 Draft Budget is planned in a realistic manner, being an adequate response to the European crisis and the developments within the Eurozone, Stavreski said.
He stressed that according to the macroeconomic assumptions, Macedonian economy in the course of next year, will achieve moderate activity growth of the Gross Domestic Product of around 2%, being higher than the average growth in the Eurozone, but less than the potential growth of Macedonian economy.
Gross investments will realize real growth rate of around 6%, while personal consumption is expected to register moderate growth of 1.5%. Import and export in 2013 are expected to experience almost the same growth, i.e. around 5.3% and 5.7% respectively.
Stavreski pointed out that construction sector was expected to achieve moderate growth of 3.5%, whereas the real sector was projected to experience slow recovery, whereby real growth rate of industrial production was projected at 2.3%, agricultural production registered almost the same growth, while the services sector surged by 1.7%. As for the projected expenditures, he explained, the trend of high level of capital expenditures, being a feature for the last years, is expected to continue, i.e. being higher by around 10.4% compared to this year. Expenditures related to goods and services are projected at Denar 17 billion and 256 million, and significant increase of health programs is also envisaged. As regards social transfers, as Stavreski underlined, projected at around Denar 74 billion and 340 million, 5% increase of pensions is envisaged, starting March 2013, as well as 5% increase of social welfare, starting the same period.
EUR 135 million is envisaged from the Budget for agricultural subsidies, including the additional funds for rural development.
As for capital expenditures, Vice Prime Minister stressed, funds have been allocated for several major infrastructure projects, mainly completion of the Corridor 10 highway, intensification of the Project for Construction of Corridor X Motorway, Section Demir Kapija – Smokvica as well as investments in the railroad infrastructure, “Rehabilitation of Eastern Part of Rail Corridor VIII Project, Phase I – Section Kumanovo – Beljakovce” and overhaul of Corridor 10.
Investments amounting to Denar 2 billion and 51 million are planned for energy projects and utility infrastructure, whereby it is envisaged to intensify the activities related to the gas pipeline, financing of the construction of sewage and water supply systems in several municipalities.
Minister Stavreski said that funds in the amount of Denar 413 million are planned for the technological and industrial development zones, as one of the Government’s priorities.
Investments of around Denar 2 billion and 164 million from the Draft Budget are planned for the heath care, mainly referring to the Project for Rehabilitation of Health Provider Institution in Republic of Macedonia Phase 1, being funded by the Council of Europe Development Bank and with budget funds as well.
Funds of around Denar 1 billion and 909 million are planned in the field of education, child care, sport, i.e. being earmarked for construction of primary and secondary schools, kindergartens and school and sports halls, reconstruction and construction of student dormitories, equipping of universities, procurement of contemporary laboratory equipment and investments in sports infrastructure.
Budget deficit will be financed by foreign and domestic funds, Stavreski stated, explaining that in terms of foreign financing, funds from the World Bank will be disbursed and used, being guaranteed, however, they will be provided from commercial banks in the amount of EUR 220 to EUR 250 million. As regards domestic financing, through issuance of government bonds, it is expected to focus on longer-term issuance of bonds: 12-month, 3- year and 5 –year government bonds.
– Such moderate level of Budget deficit, on the short run, will help Macedonian economy to more easily overcome the European crisis and its consequences, while on the long run, Republic of Macedonia, by consolidating the Budget deficit will continue to maintain low level of public debt, which is one of the features of our country. We will remain committed to the policy for Macedonia to be among the most successful countries in maintaining low level of debt, Vice Prime Minister and Minister Stavreski pointed out.
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