There will be Supplementary Budget after all
The Government will cut expenditures after all. Preparatory activities for the Supplementary Budget is being intensified. Final projections of the revenues and the expenditures will be submitted to the Government by the end of August.
For the time being, the Government stays committed to the plan for the budget deficit not to exceed the projected 2.8% of GDP.
In the meantime, Public Revenue Office announced that tax revenues continued to decline in the second quarter of the year as well.
Minister of Finance Zoran Stavreski discusses these issues in an interview on A1 TV.
PRO announced 12.5% drop in total tax revenues in relation to last year. Experts say this is an alarm indicator. What are the estimates of the Ministry?
– It is expected, if compared to last year when the Macedonian economy registered 5% to 6% growth, like the global economy, that revenues will be lower this year.
However, comparisons should be made with the Supplementary Budget, with what was projected in the Supplementary Budget, since that is the whole idea of preparing this Supplementary Budget. Revenues are lower by around 4%, which certainly points out to the need to be cautious, i.e. to try, through better coordination in the coming period, to improve the collection, i.e. to increase the revenues.
Initial data on July have already shown that budget revenues experience stabilization.
When will there be Supplementary Budget?
– We have carried out the analyses, expert services and I worked on this issue last week, and our conclusions are that there is a need for Supplementary Budget, however, such need is not urgent. We expect, after having obtained the data for July and August, in particular for the revenue side, to inform the Government, so most probably there will be Supplementary Budget by the end of the summer period.
What do initial analyses show, which budget expenditures could undergo most cuts?
– It is too early to say. During this period, I will have meetings organized with all Ministries, as well as the institutions having larger capital expenditures, such as the Agency for State Roads, the Health Insurance Fund, so as to determine precisely the expenditure performance, in particular with regard to the projects, and the most painless manner of expenditure cuts.
It is important not to stop the realization of some projects that are productive and important and, at the same time, to realize the savings that are to be achieved.
Will the Government resume with the projects the public estimated as economically illogical in times of crisis?
– I think we have no illogical projects, all projects we have proposed are an integral part of the Government program, or we believe are necessary in times of crisis in order to revive the economy.
Therefore, no project is going to be cancelled. There might be different pace of project realization.
What is the size of the budget cuts this time?
– It will depend on the revenues realized in July and August and the project performance by that time. Data we have so far point out that the budget deficit was 1.4% of GDP in the first six months, meaning we have reached the half of what was projected – 2.8% by the end of the year.
It shows that cuts in the Supplementary Budget should not be large, however when I have the data for July and August, I would be able to present more precise information.
What is the financial condition of the Budget? Are there funds for regular payment of salaries, pensions, functioning of the state?
– There is absolutely no problem in terms of meeting all social needs, payment of salaries and pensions, social welfare and everything that is to be paid from the Budget.
I expect for revenue collection to improve, to cover the current expenditures with the current revenues, and to use the funds from the Eurobond for productive infrastructure projects.