Skopje, 22 July 2025 (MIA) — The proposed changes to the 2025 budget are in line with macroeconomic developments and are based on the real needs of the citizens, institutions and the economy; they optimize and adjust the budget to priorities like meeting debt servicing obligations and using available sources of financing more efficiently, Minister of Finance Gordana Dimitrieska Kochoska said Tuesday in Parliament, presenting the proposed budget changes to lawmakers.

"Total revenues are projected at 362.4 billion denars, an increase of 1% compared to the initial plan," Dimitrieska Kochoska said.

She said tax revenues had remained stable in the first half of the year thanks to the better projecting methodology and coordination between the Ministry of Finance, the Public Revenue Office and the Customs Administration.

Additionally, she said, the government's efforts to reduce the grey economy, digitize procedures and strengthen controls were expected to contribute to an even better tax collection by the end of the year.

The finance minister said social contributions as source revenues of the pension and health insurance funds were projected at 117.1 billion denars. Total expenditures, she added, were planned at 403.7 billion denars, an increase of about 1% or some 3.5 billion denars more than the initial projections. The budget deficit remained unchanged, she said, at 41.3 billion denars or 4% of GDP.

"This deviation from the fiscal rule is due to the need of financing obligations under the law and contracts as well as high-priority infrastructure investments," Dimitrieska Kochoska said.

The increase in expenditures, she said, was based on the reallocation of funds between budget users and the use of their own revenues as additional funds for projects related to the environment, the energy sector, culture, education and health care.

She said the budget changes included additional funds for public sector salaries, including the 10% higher salaries for Ministry of Interior employees, by about 1 billion denars. 

Also, the changes would provide an additional 2.5 billion denars for pensions through the national pension fund and another billion denars for Ministry of Defense projects.

The finance minister said capital expenditures were projected at 47.4 billion denars, which was 11.7% of total budget expenditures.

"These funds are intended for road, rail and local infrastructure, reconstruction and modernization of health institutions, capital investments in education and social services, fulfillment of contracts in defense and security as well as rural development," she said.

The finance minister also discussed inflation, which she said was expected to stabilize at 2.8% in 2025.

"Although there was a short-term rise in prices at the start of the year, especially food prices, the government's measures to cap profit margins resulted in prices slowing down. Core inflation shows a stabilizing trend, which we expect will continue," Dimitrieska Kochoska said.

However, she said there was still uncertainty related to geopolitical tensions, especially the conflicts in Ukraine and the Middle East.

"The potential deterioration of international trade relations could negatively affect supply chains and investor confidence," she said.

She also said "a possible slowdown in reforms and capital projects could delay expected economic dynamics." 

Pointing to unstable prices of commodities, she noted that inflation risks remained.

Deputy public advocate Ilber Rufati also addressed the parliamentary session, stressing that despite requests to increase the Office of the Public Advocate's budget, it had not been done. mr/