Skopje, 10 January 2023 (MIA) – The Government of the Republic of North Macedonia implements sound policies that have given an adequate response to the crisis and lay the foundation for further long-term development. We conduct prudent fiscal policy that protects the stability of public finances and we are committed to reducing the budget deficit, which this year is projected at 4.6% of GDP, and next year it should be reduced to 3.4% of GDP, said Finance Minister Fatmir Besimi addressing the Central and Eastern European Forum 2023 hosted by Euromoney in Vienna.

“Policies we implement have provided access to the Precautionary and Liquidity Line (PLL) approved by the International Monetary Fund (IMF). We conduct prudent fiscal policy that protects the stability of public finances and we are committed to reducing the budget deficit, which this year is projected at 4.6% of GDP, and next year it should be reduced to 3.4% of GDP. Fiscal consolidation plan implies measures on both the revenue and expenditure side. We are dedicated to working on the revenue side through tax reform, and on the expenditure side through increasingly targeted support. An additional contribution to this reform agenda is the adopted new Budget Law that provides a medium-term fiscal framework, defining the level of deficit and public debt as those in the EU. It is crucial that our prudent fiscal policy will go together with an increase in public investments,” Minister Besimi noted, Ministry of Finance said in a press release.

He said that last year, in order to respond to the energy price shocks, the state had to provide €300 million. For that, funds were requested from the IMF under the PLL program and other instruments with more favorable conditions than if a Eurobond had been issued. We monitor the conditions of the capital markets. In the year ahead we need to provide €800 million of external financing, of which €450 million are for the return of the Eurobond due for repayment in July 2023. €80 million from the EU are expected for budget support during this month to mitigate the impact of the energy crisis, possible macro-financial assistance from the EU and support from the World Bank through development policy programs are being discussed.

“Our activities focus on protecting public finances, ensuring sound public investment, improving energy policies, dealing with high inflation and supporting financial stability. In addition to the support from the IMF under the PLL instrument, the activities that are planned will lay the foundation for sustainable long-term growth after the crisis,” Finance Minister said.

He underlined that structural reforms to encourage long-term growth remain high on our agenda and that efforts will be made to strengthen education and active labor market policies, increase the minimum wage and productivity, as well as the economic reforms that will follow which are related to already opened EU accession negotiations.

Minister Besimi also referred to the support that the country provides to attract foreign investments, as well as the support of domestic companies to strengthen competitiveness, innovation and technological development in order for them to join the supply chains of foreign companies in the country.

He noted that despite the global challenges that have significantly affected the domestic economy, foreign direct investments remain at a solid level. Thus, for the first nine months of 2022, they reached over €520 million. According to the Minister Besimi, this is a confirmation that our country remains an attractive location for investment even in times of crisis.

He presented the measures taken by the country to deal with the inflation and announced that in the last months of 2022 inflation is gradually stabilizing and has a decreasing trend.

The Central and Eastern European Forum, organised by Euromoney, is the leading event in the CEE region covering capital markets and key macroeconomic trends across the region. The CEE Forum has brought together issuers, investors, intermediaries, and policymakers from Central and Eastern Europe to network and gain valuable insights into the direction for region and its financial markets for the year ahead. The Forum once again convenes the highest level of speakers from financial and governmental institutions from across CEE and beyond.