19th July 2018, Skopje – We inherited rising public debt, which was increased by more than three times, i.e. from EUR 1.5 billion to EUR 4.7 billion in the period 2008-2016. Ministry of Finance successfully managed the public debt, whereby in 2017, the public debt was, for the first time after 9 years, reduced as a percentage of GDP, Minister of Finance Dragan Tevdovski said during the discussion about the 2017 Budget Annual Report in the Assembly.
It is worth mentioning that part of the arrears, inherited from the previous Government, was paid. VAT refund to companies was improved, being fast and on a non-selective basis. Interest rates on government securities were significantly reduced, portfolio maturity was extended, and the re-financing risk was reduced, there was buyback of the outstanding Eurobond for the first time. All this resulted in increased confidence of investors. Fitch Credit Rating Agency changed the country’s outlook from negative to positive – Tevdovski said.
Minister of Finance also said that the Government has made crucial changes in the public finance system, by increasing the transparency.
-Public not having insight into how the public funds are spent by the institutions, being collected through taxes, created much room for abuse. Therefore, public finance transparency was our very first since we took office in June. We commenced publishing reports that were not previously available to the public -Tevdovski said, adding that a series of other steps aimed at improving transparency were also undertaken.
As Minister stressed, reforms in the field of fiscal transparency were acknowledged by the relevant international organizations and the EU, whereby the EU Council was the most recent example thereof.
After the current Government took power, Minister said, the economic growth in the second half of 2017 moved into positive zone, the growth rate of which accounted for 0.7%. Private consumption and export experienced growth, while unemployment reduced to 22.4% during the last year.
With respect to budget revenues, Minister pointed out that their collection was solid, being higher by 6.1% compared to last year. As for expenditures, he underlined that all government liabilities were settled on regular basis.
-It is worth mentioning that under the Supplementary Budget as of August 2017, non-productive costs, costs for advertisements, travel costs and entertainment expenses and similar were cut on one hand, while undertaking measures aimed at improving the living standard of citizens or supporting the enterprises on the other. Minimum wage was increased to Denar 12,000, thus contributing for the average net wage to increase by more than 5%, whereby the wages in the textile, clothing and leather sectors experienced double-digit growth. Active employment measures were increased. Funds were allocated for redundancy pay, not being covered under the existing legal solutions so-far – Tevdovski said.
Minister of Finance also underlined that capital expenditures were executed at historically the highest level last year, amounting to Denar 19.86 billion, being higher by Denar 2.89 billion compared to their execution in 2016. IPA funded projects were successfully implemented.
– As regards the capital projects, major infrastructure projects in the field of utility infrastructure were implemented, pertaining to wastewater treatment stations in Radovis, Strumica, Kicevo, Prilep, as well as rehabilitation of sewage networks in Berovo and Kumanovo, completion of the Project for Construction of New Motorway Section Demir Kapija – Smokvica as part of Pan-European Corridor X, renewal and reconstruction of the railway infrastructure, investments in the field of energy, education, health and child protection – Tevdovski said.
Budget deficit in this period amounted to Denar 16.86 billion, or 2.7%% of GDP. This is lower by Denar 1.71 billion than the projected one.