Skopje, 4th September 2014 (MIA) – Intensification of the realization of infrastructure projects, in particular of Corridor 10, as well retaining of the fiscal discipline and support to the economy, is envisaged under the 2014 Supplementary Budget, upon which debate was commenced at the plenary session today.

Deputy Prime Minister and Minister of Finance, Zoran Stavreski, explaining the supplemented Draft Supplementary Budget said, that it is being made for the purpose of harmonizing the dynamics of execution of expenditures particularly as regards the infrastructure projects, with the revenue dynamics.

According to him, it is a matter of Mini Supplementary Budget, adjusting the revenue and expenditure sides, being lower by 2%, due to which this is a Mini Supplementary Budget, however, as he added, it is necessary so as to end the year as it was planned with fiscal discipline and by retaining the main parameters of fiscal policy within the projections.
Largest change made on the expenditure side, as he said, is providing additional funds in the amount of Denar 1.42 billion for construction of Corridor 10, i.e. motorway Demir Kapija-Smokvica, being carried out with more intensive dynamics compared to the projections, which is planned to be completed by August 2016.

As he stressed, adding funds in this item also leads to increase of budget deficit, accounting for 3.9%.

As for the revenue side, according to the Supplementary Budget, revenues on the basis of self-financing activities amounting to Denar 1.780 billion are projected, which as Minister said, they generated on the basis of IPA funds in the amount of Denar 706 million, donation from the Council of Europe for reconstruction of Health Provider Institutions Institution for Pulmonary Diseases to the Ministry of Health, donation from UNHCR and IPA to the Ministry of Labour and Social Policy for construction of flats for refugees, reception centers, Strategy for Roma people, and donation of Denar 25 million to the Ministry of Agriculture, Forestry and Water Economy for the Hydro-System Zletovica.

As for social contributions, it was explained that the change was lower by 1% and their realization amounted to Denar 44.703 million.

Minister Stavreski pointed out that as a result of the developments in the economy in the first quarter and the trends in the industrial production, GDP projection was revised, which, as he said, increased from 3.2% to 3.5% with a potential to be even higher than 3.5%. – However, we proposed relatively conservative alternative and we believed that it was achievable, Stavreski said.

According to the Supplementary Budget, decrease for the goods and services financed from the core budget, is envisaged, as well as reallocation of funds for social transfers among the funds intended for pecuniary allowance, social rights and pensions.

Stavreski pointed out that there were appropriate savings at budget users, where there were sufficient funds for realizing the envisaged projects by the end of the year.

For the purpose of executing the Budget in the period January -July this year, Minister Stavreski said that total revenues in the amount of Denar 81.429 billion were realized. Thereby, tax revenues and social contributions were realized in the amount of Denar 72.562 billion. Denar 47.642 billion out of them are tax revenues, 53% out of which are on the basis of VAT.
In the first seven months, capital revenues amounted to Denar 1,388 billion, Denar 959 million out of which were revenues from the payment of dividend of AD Makedonski Telekom (Macedonian Telecom), while the others were from the sale of construction land and socially-owned flats.

Total expenditures, as Minister explained, were realized in the amount of Denar 96.867 billion, whereby the current expenditures amount to Denar 87.2228 billion.

– Capital expenditures were realized in the amount of Denar 9.639 billion. In this period of the year, activities for realization of major infrastructure projects have been intensified, such as construction of Corridor 10 and investments in the reconstruction and construction of railway infrastructure. Several projects aimed at improving the infrastructure in the field of education, health, utility infrastructure, as well as reconstruction of health facilities, were implemented, Stavreski said.

He went on that that agricultural subsidies were continuously and timely paid in this period, and as of August inclusive, Denar 4.9 billion was paid as a direct support to farmers. Budget deficit in this period amounted to Denar 15.438 billion, or 3.1% of GDP.

As for the explanation about the Supplementary Budget, Minister Stavreski stressed that total central government debt as of July 2014 inclusive, accounted for 40.8% of GDP, by which Macedonia has become among the least indebted countries in Europe, i.e. with moderate level of indebtedness, adding that this policy will continue to be conducted in the next period as well. – In addition, the credibility, the confidence and the discipline will be enhanced through the constitutional amendments as well, Minister said, adding that the current situation and projections for the next three years indicate that Macedonia will further remain moderately indebted country.

He explained that additional funds for financing the Budget and what follows in the coming years, have been provided under the Eurobond issued in July. He went on that pre-financing was carried out for 2015, i.e. funds for liabilities falling due in 2015 have been provided in advance. Thus, despite the fact there are risks on the market, Macedonia managed to provide these funds.

Debate about the Supplementary Budget according to Rules of Procedure lasts for five days at the most.

The agenda at the 14th session, also includes the draft laws on modifications and amendments to the Law on Primary Education and the Law on Secondary Education, both of them applying the summary procedure.

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