Skopje, 13 May 2026 (MIA) - Our focus remains on protecting citizens’ standard of living and the budget rebalance will stay within that framework, Finance Minister Gordana Dimitrieska-Kochoska said in an interview with MIA, referring to the ongoing discussions on the budget rebalance.

Dimitrieska-Kochoska said that citizens can rest easy knowing the budget remains liquid, all obligations are being serviced and salaries, pensions as well as commitments to economy are being paid on a regular basis.

“In this context, there will be no changes to the budget items that support economic growth and are progressing according to plan, particularly capital investments and citizen support measures aimed at raising living standards,” Dimitrieska-Kochoska stressed.

She said that the budget rebalance will remain anchored within the medium-term fiscal framework defined by the 2027-2031 fiscal strategy.

According to the published data, public debt in absolute terms amounted to EUR 10.747 billion in the first quarter of this year, or 59.7 percent of GDP, and as she noted, this represents a decline of 1.5 percentage points compared to the level recorded on 30 June 2024, when the current government took office.

“We are exercising great caution in managing public debt and public finances overall, and we are firmly committed to creating the conditions necessary to achieve higher and sustainable growth rates,” the Finance Minister stated.

Below is the full interview with Finance Minister Dimitrieska-Kochoska for MIA:

Minister, discussions have begun on reshaping the state budget for 2026. Which budget items are expected to change and where could cuts be anticipated?

Yes, since the start of this week we have been holding meetings with budget beneficiaries as part of the preparation of the 2026 budget revision, with a goal of identifying the priorities that will be our focus until the end of the year, while bearing in mind the uncertainty stemming from geopolitical developments and the war in the Middle East. Our economy is not isolated from external events and that’s why we are taking a particularly prudent approach in creating policies that will secure stability, resilience and sustainable growth for the Macedonian economy.

The discussions with ministers are being guided by projects that have been realistically completed as well as by realistic expectations regarding their continued implementation by the end of the year, with objective of channeling resources toward priorities that that are achievable, measurable and produce tangible effects.

Protecting citizens’ standard of living remains our focus and the budget rebalance will stay within that framework. Citizens can rest easy knowing the budget remains liquid, all obligations are being serviced, and salaries, pensions as well as commitments to economy are being paid on a regular basis. In this context, there will be no changes to the budget items that support economic growth and are progressing according to plan, particularly capital investments and citizen support measures aimed at raising living standards.

The meetings are still underway and we will have a clearer picture once they are completed. As a matter of principle, budget rebalance will remain anchored within the medium-term fiscal framework defined by the 2027-2031 fiscal strategy, which was recently adopted by the government.

You said the government is not moving away from its fiscal consolidation goals with the budget rebalance. When can we expect to meet the fiscal rules of a 3 percent budget deficit and public debt below 60 percent?

The adopted fiscal strategy, which underpins this year’s fiscal policy and will be reflected in the rebalance, continues to prioritize sustainable and stable public finances over the medium and long term, gradual and responsible deficit reduction and the preservation of macroeconomic and financial stability amid continued energy and price uncertainty. Fiscal consolidation, in my view, is rooted above all in fiscal responsibility and discipline in the planning and use of public funds, within realistic and sustainable limits. In practical terms, this means a phased approach rather than sudden restrictions, as we do not want to harm the economy or disrupt the growth cycle of around 3.5 percent achieved over the past year and a half. Our goal is to meet the 3 percent deficit threshold from 2028 onward and to reduce it even further thereafter, while simultaneously creating conditions for continued economic growth. Fiscal consolidation is not only an objective, but a necessary process given the constant uncertainties and the need to build safeguards against possible future shocks. This is an issue facing many European countries as well, as they continue to struggle with high budget deficits. For us, however, it is an even greater challenges because we are still a developing country. That is why fiscal consolidation, alongside prudent and disciplined management of public funds, remains a priority. 

Is this approach also reflected in public debt management? What is the Ministry of Finance’s strategy?

In accordance with the regular reporting schedule, the Ministry of Finance published public debt figures for the first quarter of 2026 at the end of April. The data show that public debt stands at EUR 10.747 billion, or 59.7 percent of GDP, representing a decline of 1.5 percentage points compared with 30 June 2024, when the current government took office.

This means that budget resources have supported economic growth at a pace exceeding the absolute increase in debt. When discussing borrowing, what matters most is the purpose for which funds are used. For the public to better understand, this government is facing a major challenge in servicing obligations inherited from previous years that are maturing over the current four-year term. Last year, we repaid a EUR 500 million Eurobond. This year, another EUR 700 million Eurobond is due, half of which has already been repaid, while the remaining half will be settled in June 2026. Put more simply, there are a total of EUR 9 billion in inherited debt obligations, covering both principal and interest that this government must service from 2026 and 2031.

Managing public debt, particularly when it has already reached the psychological threshold of 60 percent, requires extreme caution in order to preserve public finance stability while also ensuring funding for development. The figures themselves provide a clear picture of what we are doing when it comes to public debt. In 2017, public debt stood at EUR 4.78 billion and by the second quarter of 2024 it had reached EUR 8.87 billion, effectively doubling during the tenure of the previous government. What I would like to underscore once again is that from the second half of 2024 through the first quarter of this year, EUR 1.2 billion was secured solely for servicing Eurobonds. This covers principal alone and represents only part of the obligations that matured, in addition to liabilities related to project implementation and domestic market obligations. What is particularly important to me are the funds we secured for municipal projects during this period as well as EUR 250 million we lent to the economy, which is currently recorded as public debt but will be returned to the budget. Most importantly, this project is already generating effects on economic development. I want to underscore that we are taking highly cautious approach to managing public debt and public finances as a whole and we remain strongly committed to creating conditions for achieving higher and sustainable growth rates.

Photo: MIA archive