Government adopts budget rebalance: Fiscal space for new measures, higher salaries and pensions

New, additional 76 million euros in case new measures are needed to protect the standard of citizens and support for companies, additional 52 million euros for farmers, increase pensions and teachers' salaries, as well as subsidies to increase the minimum wage. This is provided by the supplementary budget, adopted by the Government, which was presented to the public by the Minister of Finance Fatmir Besimi.

The total revenues with the Supplementary Budget are planned at the level of Denar 245,8 billion and they are about Denar 6,9 billion or 2,9% higher compared to the initial budget projections. The total expenditures are planned at the level of Denar 288,5 billion or higher by 5,9%, ie by about Denar 16,1 billion more compared to the initial projections with the plan for 2022. That is, 24,2 billion denars are the additional expenditures, of which 4,2 billion denars for the increase of pensions are realized by PDIF, and 4 billion have budget cuts with the supplementary budget. Based on the planned revenues and expenditures, the deficit is planned at the level of Denar 42,7 billion, ie 5,3% of GDP.

"Additional financial support of 4,7 billion denars is projected for protection of the standard of the citizens and the liquidity of the companies in conditions of prolonged crisis on the world market of energy and primary products. We provide protection - buffer, to have room for quick reaction with new measures to protect citizens and the economy. We have envisaged additional 3,2 billion denars for subsidies for farmers, in order to stimulate yields and amortize the price pressures on basic food products. It is also planned to increase the transfers to the LSGU for increasing the salaries of the employees in the kindergartens, as well as for the employees in the primary and secondary schools by 15% starting from September 2022. Pensions have been further increased, in accordance with the new methodology for calculating pensions. "Funds are planned for the program for subsidizing salary support contributions," said Besimi.

Capital expenditures are planned at the level of 32,2 billion denars or about 6 billion denars lower than the plan for 2022. However, this amount is by 8,8 billion denars higher than last year or by 16,1 billion denars, ie twice higher than in 2020.

The Minister pointed out that significant investments with budget funds are planned in the field of road infrastructure, Corridor 8: expansion of the highway Tetovo - Gostivar, construction of a new highway Trebenishta - Struga - Kafasan, construction of the section Gostivar - Bukojcani, Rankovce - Kriva Palanka and Kriva Palanka to the border with Bulgaria, as well as the western part of the road Corridor 8 through the construction of the highway section Kicevo - Bukojcani and the section Kicevo - Ohrid. The section Prilep - Bitola is planned on Corridor 10. Additionally, PESR will prepare a feasibility study for the construction of the road Tetovo - Prizren. Also with credit funds is envisaged the construction of the highway section Skopje - Blace (border with Kosovo), the improvement of the road infrastructure of the municipalities in the Republic of Northern Macedonia through the Project for connecting local roads.

In the area of ​​railway infrastructure, it is planned to finance the three phases of construction and rehabilitation of the eastern part of the railway - Corridor VIII, as well as the project Construction of the railway Kicevo - border with Albania. The construction of a railway border crossing with accompanying facilities "Tabanovce" between the Republic of Northern Macedonia and the Republic of Serbia is also planned.

In the field of gasification, construction of main gas pipelines section Skopje - Tetovo, Gostivar - Kicevo and section Sveti Nikole - Veles, construction of an interconnection gas pipeline between the Republic of Northern Macedonia and the Republic of Kosovo, construction of an interconnection gas pipeline between the Republic of Northern Macedonia and the Republic of Serbia. as well as construction of an interconnection gas pipeline between the Republic of Northern Macedonia and the Republic of Greece.

Minister Besimi stressed that several major capital projects are planned in the protection of the environment, health and education.

The deficit and repayment of external debt and domestic debt, which amount to Denar 11,8 billion, or a total of Denar 54,5 billion, will be financed through borrowing on the international and domestic market. Given the current economic and foreign policy situation, this year a greater focus will be placed on financing from international markets. This commitment will enable more money from the domestic banking sector to be used in the Macedonian economy, and additionally, through external sources of financing will increase the foreign exchange reserves of the country.

Economic growth for this year is projected at 3,2%, in line with the IMF projection, while the inflation rate in 2022 is projected at 7,2%. The growth of the number of employees is projected at 1,6%, which will contribute to the average employment rate to increase to 47,9%, while the unemployment rate to decrease to 14,5%. The average net salary is expected to grow rapidly with a projection of 11% for 2022.

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