Stavreski: If there had been no political crisis, economic growth would have reached 5%

Political crisis has to have an ending, since even the most robust and solid economies in the world could not sustain a long-standing crisis. Thus, it is really disappointing that the well-structured economic policies are hindered in yielding economic growth, which Macedonia has the potential to achieve. At the moment, Macedonian economy has the potential to realize 4% to 5% growth, Minister of Finance, Zoran Stavreski, said at the interview for TV Nova.

Under normal political circumstances and environment, without any political crisis, Macedonia has the potential to achieve 4% to 5% growth, particularly when other countries experience 1% growth and some European countries register growth lower than 1%. Macedonia has a track record of accomplishing good results, even in an environment where other countries were experiencing declining growth (negative or low), Macedonia generated growth rates of 3% to 3.5%. When unemployment was increasing in the other countries, it declined in the Republic of Macedonia. Export was growing and continues to grow, and it is good that the foreign companies have understanding of the situation”, Minister Stavreski said.

Macedonia surely has the potential for economic growth, which is the highest in the region. According to the projections of the international financial institutions, such growth will be around 4% in the period 2016 – 2017, and it might be even higher in 2018.

If there is continuity in implementing the economic policies, all this would have helped in unemployment reduction to around 22% as projected. We have the strength to achieve this, there are also projects implemented thereto, such as was “Macedonia Employs” Project, Stavreski stated. According to him, this favourable trend must not be interrupted and it must not be allowed for the political environment to disrupt such trend to the extent that Macedonia loses its reputation of a country with favourable business climate. He underlined that “like everything else in life, if reputation is lost once, it is hard to restore it, hence if foreign investors are disappointed from the political environment, it would be hard to bring them back to the country”.

Companies, like the citizens, are concerned about the recent political developments. According to the Minister of Finance, “in the past period, domestic companies showed they could adjust to the ongoing latent political circumstance, not only in the country, but also in the region. However, small companies are those suffering the most, since they always have difficulties in accessing finance, even in normal circumstances. Therefore, it is a really disappointing that that the well-structured economic policies are hindered in yielding economic growth, which Macedonia has the potential to achieve”.

Well-structured economic policies deliver results

For many years now, the Government has been creating favourable economic environment, which has contributed for Macedonia to manage the 2015 crisis well, despite its severity, Minister of Finance, Zoran Stavreski, said for TV Nova.

Economic environment was based on solid foundations, and that is why, despite the severity of the political crisis, we had good performance in 2015, as well as at the beginning of 2016. However, we have to separate facts from expectations. The facts are that the political crisis commenced in 2015, maybe even earlier, in the years before, and there was a latent crisis. Macedonian economy sustained the crisis well, which is evident from the 3.7% growth achieved, being the highest in the region. It has been confirmed that foundations of the Macedonian economy are well structured, and leading economic policies are in favour of the private sector. These are maintaining good business climate, among the best in the world, low taxes, high capital investments, improving access to finance by providing favourable credit lines, coordination between the monetary and the fiscal policies, measures such as “Macedonia Employs” Project, all of which have helped the domestic companies, as well as attracting foreign investments, including significant number of major greenfied projects, as a policy which has attracted large number of foreign investors", Stavreski stated.

He went on explaining that industrial production reached average growth of more than 11% in the first two months in 2016. In February, growth was 15%, the highest in the previous years.

Export experienced 7% growth, and there are other favourable indicators in the trade sector, as well as the construction sector. Unemployment dropped from 38% to 24.6% as a result of these measures. All this speaks of well-structured economic policies, and the private sector on the basis of such economic policies has experienced good economic performance - these are facts. However, if we talk about what might happen from now onwards, there is undoubtedly no economy that can sustain long-term political crisis, especially a severe one, and that the political crisis puts a great strain on the economy”, Stavreski said.

Elections to uphold economic stability

It is important for the political crisis to end, to have an epilogue, to end the crisis through dialogue, with the elections envisaged to be held on 5th June, Minister of Finance Stavreski stated.

There has to be certain stability which will allow the companies to have predictability for the next 4 years, to be aware of the policies in the next four years, the taxes, the business climate and everything else that is necessary so that they can start planning - to plan their investments and employment decisions. The crisis has to have an ending, since even the strongest economy cannot sustain a long-standing crisis”, Stavreski said.