Skopje, 14 June 2023 (MIA) - Continuing fiscal consolidation, gradual decrease of the budged deficit and public debt, encouraging economic activity though capital expenditure and investments in infrastructure and improving conditions for running a business, and creating new job positions, are the expected results from the medium-term projections within 2024-2028 Fiscal Strategy of the Republic of North Macedonia, drafted by the Ministry of Finance and adopted by the Government.

The Finance Ministry informed Wednesday that the fiscal strategy will contain midterm fiscal policy guidelines and targets, basic macroeconomic projections, the amount for the main groups of estimated revenues and expenditures, and projections for budget deficit and debt. It is made in accordance with the new Budget Law which establishes fiscal rules designed and aligned with those of the EU, with the aim of making fiscal policies sustainable in a medium term.

"The Fiscal Strategy is an important document that sets the midterm guidelines by which the fiscal policies will be conducted moving forward. Key elements of the midterm fiscal policy are redesigning budgetary policies and fiscal consolidation that support the micro-economic stability, accelerating economic growth, and thus strengthening potential growth of the domestic economy," said Finance Minister Fatmir Besimi.

In the next five-year period, expenditures will take into account the country's strategic priorities, accelerating economic growth, prioritizing North Macedonia's EU integration process, and obligations arising from the NATO membership.

"The commitment for fiscal consolidation and gradual reduction of the budget deficit from 4.6 percent in 2023, to 3.4 percent in 2024, 3 percent in 2025 and 2026, 2.8 percent in 2027 and 2.5 percent in 2028, continues. Fiscal consolidation will continue by supporting the economy through investments in infrastructure projects, redesigning the structure of public finances through increased share of capital expenditures, as well as strengthening the planning, execution and reporting of public finances process. The focus on fiscal policy will remain to secure a significant level of public investments, which are a prerequisite for improving economic prospects, and a better life for citizens. Thus, midterm fiscal projections have a strong development component, with a significant share of capital expenditures of over 5 percent of GDP on an annual basis, and represent key elements of public finances," said the Finance Ministry.

According to the Ministry, the main priority of the tax policy is ensuring sustainable economic growth and development through the Fiscal Strategy, aimed at improving efficiency and effectiveness in revenue collection, increased tax transparency, better service quality and reduction of the administrative burden.

"The Strategy is expected to maintain the macroeconomic stability and fiscal sustainability in creating more favorable conditions for dynamic economic growth and achieving an average growth of 5 percent in period 2024-2028. Private consumption is expected to reach an average annual growth of 3.5 percent, public consumption will grow an average of one percent, exports are expected to maintain a solid level and have a projected growth of 8.5 percent, positive trends in foreign investments are expected to continue, and the rise of the average salary is to reach 6 percent," the Finance Ministry adds.

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