Skopje, 4 November 2023 (MIA) – The draft-budget for 2024 targets the priorities and adequately reallocates funds in order to meet the public needs of the citizens and businesses. In 2024, an improvement of public finance management is expected, as well as, enhanced midterm budgeting, redesigned budget policy and fiscal consolidation – activities aimed at supporting macroeconomic stability, accelerating economic growth, and with that, strengthening the potential for growth in the domestic economy, said Finance Minister Fatmir Besimi during his presentation Monday of the draft-budget at a session of Parliament’s Committee on Finances and Budget.

The total revenues for 2024 are projected at Mden 310.1 billion or 10 percent higher than in 2023, while expenditures are projected at Mden 343.6 billion, or 5.8 percent higher compared to 2023.

“These projections of revenues and expenditures result in a reduced budget deficit compared to 2023 by approximately Mden 9.2 billion. The deficit is projected at an absolute amount of Mden 33.5 billion, or about 3.4 percent of the planned GDP. The projected level of budget deficit affirms the consistency of the fiscal policy, which is in line with the midterm fiscal framework,” said Besimi.

According to the Finance Minister, the budget revenue projections are based on the realization of revenue in 2023, expectations for economic growth, and the improvement of efficiency and effectiveness of the public revenue collection system.

The draft-budget for 2024, according to Besimi, envisages the creation of conditions for sustainable economic growth; continuation of fiscal consolidation and strengthening of fiscal sustainability; allocation of funds for targeted aid for vulnerable categories of citizens and businesses; intensification of the country’s convergence with the EU, as well as the implementation of tasks arising from the country’s NATO membership.

“Current expenditures for 2024 are projected at Mden 298.6 billion, or 6.7 percent more than 2023, and are above all intended for regular payouts of the wages of public sector employees; timely and regular payout of pensions; guaranteed minimum income and other social rights; payout of agriculture subsidies; assistance for small and medium-sized enterprises; assistance and subsidies for innovative activities of enterprises; as well as allocation of funds for targeted assistance of vulnerable categories of citizens and businesses,” said Besimi.

The growth of the economy is projected at 3.4 percent, while the rate of inflation is projected up to 3.6 percent.

At the session, the President of the Fiscal Council, Gligor Bishev, said the draft-budget for 2024 follows all trends outlined in the fiscal strategy for the 2024-2028 period.

According to Bishev, in terms of the budget deficit, the accepted rule is that it should not exceed 3 percent of GDP, this rule can be deviated from in conditions of economic or political crisis. The total public debt should not exceed 60 percent of GDP, he added.

“Despite the significant reduction in the budget deficit, the fiscal strategy for public debt estimates that this percentage could be exceeded in 2024 and reach 62 or 63 percent, however it anticipates its reduction under 60 percent sometime by 2027. Our proposal is that this percentage is based on the rule of the European Union, but considering the specifics, the economic science in North Macedonia estimates that the economic limit is somewhere between 53 and 55 percent. In the long term, this debate should be encouraged, in order to determine the economic limit of indebtedness, i.e., what percentage of additional debt creates additional economic growth,” said Bishev.

Opposition party VMRO-DPMNE assessed the draft-budget as "the largest in the country’s history, unrealistic, not focused on development, created without a concept, lacking a clear vision and built on unsustainable foundations". The President of the Committee and VMRO-DPMNE MP, Bojan Stojanovski, said the budget has been drafted without a sustainable strategy focused on realistic development of the economy.

SDSM MP Marija Gjorgjievska on the other hand, said the budget is projected to ensure assistance due to the acceleration of growth through increased investment activities, support for the citizens, promotion of public services and securing macroeconomic stability.

The Committee on Finances and Budget kicked off the debate on the draft-budget on Monday. The debate is set to last 10 working days, after which the draft-budget will be forwarded for review and adoption at a plenary session of Parliament. According to the legal deadlines, the budget for 2024 must be adopted in Parliament by December 31, at the latest.