Skopje, 18th June 2015 (MIA) – Macedonia showed favourable economic performance last year, and the Budget was executed in line with the expectations and within the envisaged framework, Deputy Prime Minister and Minister of Finance, Zoran Stavreski, announced Thursday before the members of the Financing and Budget Parliamentary Commission.
By presenting the draft Annual Report for last year’s Budget, Stavreski underlined that 3.8% economic growth was realized in 2014, being the second best result in Europe after Ireland, foreign direct investments reached EUR 262 million or EUR 10 million more compared to 2013, unemployment dropped by one percentage point, accounting for 27.6, envisaged increase of the pensions was realized, as well as the commitments regarding the agricultural subsidies.
Revenue realized amounted to Denar 145 billion 929 million, accounting for 94% of the projected revenues, while execution of budget expenditures accounted for 96% of the projections.
– Budget execution provided for favourable economic outcome and preserving of both the fiscal and the monetary stability, which is important for Macedonia as a small country where due care needs to be taken as regards the total debt level and the budget deficit level. On the other hand, the Budget is used as the main instrument to support the economic growth, Deputy Prime Minister pointed out.
According to him, economic growth was mainly driven by the gross investments and the export. Export grew by 17%, mostly as a result of the production in the capacities in the free economic zones, also supported by the gradual improvement of the trends in the European economy, which experienced 1.4% growth.
– It is good that export growth was also driven by change in the structure of export products towards higher value-added production. Gross investments also experienced two-digit growth rate of 13.5%, above all as a result of the significant investments in both the public and the private sector, mainly in the construction, Stavreski underlined.
Positive economic trends, Minister of Finance said, also contributed to the reduction of the unemployment rate. Average inflation rate, on the other hand, accounted for – 0.3%, mostly as a result of the prices of liquid fuels, i.e. the oil, which experienced downward trend on the global stock markets.
– As a result of such developments, current account deficit accounted for 1.3%, being lower by 0.5 percentage points compared to 2013, while foreign direct investments reached EUR 262 million, being by EUR 10 million or by four percentages more in relation to 2013. FDIs accounted for 3.1% of GDP, similar like in 2013, gross foreign currency reserves amounted to EUR 2 billion 432 million or by 22% more compared to 2013, mostly as a result of the issuance of the Eurobond, Stavreski said.
Fiscal policy, he added, as one of the key policies in 2014, was implemented to the end of maintaining the stability and the sustainability of budget deficit level and public debt level, at the same time providing for support to the development of the economy and fulfilling the obligations towards the social categories.
– As for the projected budget funds, revenue performance amounted to Denar 145 billion 929 million, and the revenues were intended for financing the expenditures, which reached Denar 168 billion 62 million. Such level of budget revenues and expenditures resulted in a budget deficit, which was within the expectations. Performance of total revenues accounted for 94% of the projections, being a slightly better than the usual collection. Revenues collected on the basis of VAT (51.5%) and excises, around 20%, contributed the most to such revenue performance, Deputy Prime Minister pointed out.
Non-tax revenues amounted to Denar 10 billion 634 million, mainly on the basis of fees, concessions, …, while capital revenues reached Denar 1 billion 874 billion, half of which is Telecom dividend.
Current expenditures accounted for 2.4% less than the projections and their execution provided for regular performance of the activities of the budget users. Transfers accounted for 71% within the current expenditures, salaries participated with around 15%, goods and services accounted for around 10%, while interest payments participated with 3.4%.
– Pensions and social benefits were increased by 5% in 2014, as planned within the Government program. Total of 296,000 pensioners received increased pensions, which amounted to Denar 12,487 in average. Commitments regarding the agricultural subsidies were met as planned, capital expenditures reached Denar 17,623 billion, being by 6% more compared to 2013, Deputy Prime Minister pointed out.
According to him, capital expenditures included the ones related the large number of infrastructure projects, among which the major ones: Corridor 10 (Demir Kapija – Smokvica section) – Denar 2,292 billion, reconstruction of Corridor 10 railroad and part of the railroad towards Bulgaria – Denar 529 million, investments in energy and utilities infrastructure – Denar 2,260 billion and technological zones – Denar 267 million, investments in the health sector – Denar 1,228 billion, education, sports and child protection – Denar 1,491 billion, agriculture and rural development Denar 957 million, as well as justice and judiciary – Denar 213 million.
Budget deficit was financed by combining domestic and foreign debt instruments through issue of government securities and the Eurobond in the amount of Denar 32 billion 225 million.
– As a result of execution of last year’s Budget, Macedonia continues to maintain moderate level of debt in line with the projected debt dynamics. General government debt accounted for 38.2% of GDP at the end of 2014. This figure also included the Eurobond, while later on, in the course of 2015, general government debt level was further reduced, considering the prepayment of liabilities from the Eurobond funds, as well as with domestic securities, Stavreski underlined.
The figure of 38%, he pointed out, is the fourth lowest general government debt in the EU in relation to the other countries.
In the course of 2014, Macedonia was affirmed its rating from the two renown credit rating agencies on the basis of the stable fiscal and monetary parameters.
Financing and Budget Parliamentary Commission supported the draft amendments to the Law on Personal Income Tax, deciding for the second reading to take place.
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