3rd January 2019, Skopje – President of the Government of the Republic of Macedonia, Zoran Zaev, and Minister of Finance, Dragan Tevdovski, held a press conference today, summarizing the results from the financial and the economic policies the Government achieved last year, also announcing the 2019 expectations.
Prime Minister Zaev pointed out that last year was a year of putting the Euro-Atlantic integrations back at the top of the agenda, a process expected to be completed with the adoption of the constitutional amendments. This will provide for signing the NATO Accession Protocol, thus Macedonia will ensure safe and stable future, as well as realistic and sustainable economic outlook.
“This gives us the right to regard 2019 as a year of achieving economic results, a year when the economy starts functioning for everyone, having thereby set sound bases in both the Budget and the economic policies aimed at supporting the business and the investments”, Prime Minister Zaev said, adding that, in parallel to the sound fundamentals for a growing economy, a whole system of social justice reforms has been also put in place, as basis for better living of all citizens.
We are promoting a new, just taxation, pension system reform to stop the upward deficit trend and improved social welfare.
“The upward trend of wages and employment in the private sector will continue in 2019, underpinned by government measures, providing for the household disposable income to surge. We have projected for the unemployment to drop to record low 20% within the active employment measures – a set of measures amounting to Denar 1.1 billion, as historically the highest amount allocated so far under the employment policies”, Prime Minister Zaev pointed out.
He also underlined that the Macedonian Government remained committed to increase the support for domestic and foreign investments with a higher budget by 40% compared to 2018 Supplementary Budget, whereby the managers and the companies would thus be provided increased competitiveness through the new investment measures, measures aimed at supporting the export and entering new markets, job creation, subsidies for innovation activities, technological development and research, as well as other advantages, equally available to both the domestic and the foreign companies.
“In 2018, 16 new foreign investments started to be realized, investments which will have a significant effect on the economy. Two hundred and fifty domestic companies were extended direct assistance under the new Law on Development Support through the Fund for Innovation and Technology Development. Fifteen companies got licensed for production of medical cannabis oil, employing 300 persons and an expected total capital turnover of more than EUR 100 million. This accounts for 1% of country’s GDP. More than 15 companies started operating in the agricultural sector, more than 20 companies were opened in the industrial zones in the municipalities outside the TIDZ”, President of the Government Zaev reiterated.
Prime Minister Zaev said that agriculture was expected to also contribute strongly to the overall economic growth, the budget therefore being increased, including the “Green Oil” measure aimed at subsidizing agricultural holdings up to 30% when procuring fuel for agricultural machinery, being introduced for the first time in our country.
The Government remains focused on the Equal Regional Development Program, funds in the amount of around Denar 512 million being allocated therefore, being by Denar 107 million more compared to 2018 Supplementary Budget, intended for development of planning regions, village development projects, as well as the Municipal Services Improvement Project for implementation of capital investment projects aimed at better living and environment protection.
As regards capital investments, boosted activity is envisaged in 2019, in particular in road and railway infrastructure, the priority being Rail Corridor VIII.
“Involvement of the European Union and its financial institutions with favourable loans for capital projects in Macedonia speaks in favour of recognizing our and the EU integration of the Western Balkan as a geostrategic investment in a stable, strong and united Europe, based on common values and standards”, Prime Minister Zoran Zaev underlined at the joint press conference with the Minister of Finance Tevdovski, summarizing the results of last-year’s financial and the economic policies of the Government and announcing the expectations for 2019.
Ministers Tevdovski, as regards his part, pointed out the fact that key objectives of the economic policies were successfully realized in 2018: wages increased, employment surged, as well as the 10 key reforms aimed at improving the public finance system yielded the expected results in 2018.
“Strong wage increase rate of around 4.5% is expected to continue in 2019 as well. Wages will increase in both the public and the private sector. Such increase has already been projected in the Budget: 10% wage increase for the medical specialist and 5% increase for the other medical personnel, starting with the January wage; 5% wage increase of the employees in the kindergartens and the schools, as well as the administration, starting with the September wage. Higher wages will contribute to increased consumption in the economy, thus providing for revival of the economic activity”, Minister of Finance, Tevdovski, said.
According to such expectations, as Tevdovski said, and taking into account the projections of the international economic surrounding, real economic growth in 2019 will pick up to 3.2%. This is in line with the latest projections of the relevant international and domestic institutions (IMF – 2.8%, World Bank – 2.9%, NBRM – 3.5%). Improved Public finances will, as a bloodstream, provide for 2019 to be a year of higher wages, more jobs created and more investments.
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