"Finance Think": Electricity subsidies and price freezes should end

Photo: "Free Press" - Dragan Mitreski

Did the government's measures to deal with the food and energy price crisis protect the citizens? This is the question to which the Institute for Economic Research and Policy "Finance Think" asked for an answer in its analysis.

The measures implemented by the Government to deal with the crisis with food and energy prices saved a significant part of the income of households, especially the poorer ones, but a lot of money was spent on non-targeted measures that gave privileges to those who could have been on their own. meet the costs, the analysis of the Institute for Economic Research and Policy "Finance Think" shows. From there, they say that subsidizing electricity and freezing prices should end.

"It is crucial that the government continues with the process of reducing and eliminating non-targeted measures. Considering the relatively favorable movements in the stock exchange prices of energy sources, the phase of exiting from subsidizing the prices of electricity and thermal energy should end sooner and by the end of this year at the latest. It is necessary to think about replacing a non-targeted measure for frozen prices of basic food products with another contingent of measures, depending on the problems that may be present on the ground. If there is unfair bargaining on the prices of food products, in conditions where the growth of the prices of inputs in the product process or of import prices is significantly reduced, and for some products even negative, then the mechanisms of the antimonopoly legislation should be harnessed," he writes. in the analysis.

"Finance Think" notes that in terms of revenue measures, their narrower targeting and calibration is necessary to support fiscal consolidation. This particularly applies to the amount of spending on pensions. Supplementing pensions, except for the lowest pensions, beyond the foreseen legal adjustment, represents a risk for the pension fund and for the central budget, in general.

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