16th January 2018, Skopje – As of 2018, we would like for the medium-term budgeting to start, to expand the projections beyond the current fiscal year, including a plan for the next three or four years, Minister of Finance Dragan Tevdovski said today in his address at the main panel of the Euromoney Conference – the biggest conference in the field of finances in Central and Eastern Europe, being held for a 23rd year in a row in Vienna.
As Minister said, this reform will be implemented in cooperation with the International Monetary Fund.
-Together with the IMF, we will work on implementing the fiscal rules, mechanisms, by which we will efficiently control the public debt level. One of the key benefits is that the way of projecting will be changed, and the targeting will be improved in particular as regards social allowances and agricultural subsidies, by which their effectiveness will be improved, Tevdosvki said.
Tevdovski was praised by the other panelists for the exceptional low price, i.e. the interest on the Macedonian Eurobond issued on the international capital market last week. Minister underlined that Macedonia issued Eurobond with historically the lowest interest, which can be deemed as a success due to several reasons.
– First, interest of investors was huge, and there was large demand of EUR 3.5 billion or 7 times higher than the offer. This is a clear signal that the international investors positively assessed the outlook of Macedonian economy. Second, historically the lowest interest was reached. This clearly speaks of the fact that the economic policies in the past were not so successful, due to which, perhaps a higher price was paid for the previous Eurobonds. Third issue I would like to stress is that Macedonia has now for the first time started to proactively manage the public debt, Eurobond falling due in 2020 was refinanced with twice lower interest, by early repaying one third thereof, which should have fallen due after three years, Minister Tevdovski underlined.
Tevdovski said that steps for gradual fiscal consolidation have already been undertaken, by which under this year’s Budget, the budget deficit is reduced from 2.9% to 2.7%, which is planned to be reduced to 2% by 2020. Fiscal transparency has also been significantly increased, non-productive costs have been cut, and according to the tax reforms planned for next year, the revenue collection will be improved, which will also contribute to reducing the budget deficit.
Minister of Finance was one of the Keynote Speakers, together with Ewald Nowotny, Governor of the National Bank of Austria, Vardan Aramyan, Minister of Finance of Armenia, Mamuka Bakhtadze, Minister of Finance of Georgia, Zdravko Maric, Minister of Finance of Croatia, Vilius Sapoka, Minister of Finance of Lithuania and Dusan Vojovic Minister of Finance of Serbia.
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