Government adopted the Draft 2016 Supplementary Budget

Skopje, 24th June 2016 (MIA) – At its session held yesterday, Government of the Republic of Macedonia adopted Draft 2016 Supplementary Budget, comprising funds for salaries, pensions and social transfers, while capital expenditures remain at high level.

As Minister of Finance, Kiril Minoski, explained at the press conference, the need to adopt this Supplementary Budget was due to the revised GDP growth projections from the initially forecasted 4% to 2.3%.

He explained that as a result of revised GDP growth projections, it was necessary to accordingly revise both total revenue and total expenditure projections. As for the revenue side, projections are revised downward by around 2% or by Denar 3 billion, while with respect to the expenditure side, they underwent downward revision by Denar 804 million, Minoski said.

- What I would like to share with the citizens is that the Supplementary Budget does not jeopardize the salaries, the pensions and the social transfers, capital expenditures are slightly reduced, however they remain at high level and are higher by Denar 3.8 billion compared to 2015, Minoski underlined.

He pointed out that the Supplementary Budget still incorporated all initially envisaged projects.

- The revisions made pertain to the spending dynamics according to the present conditions and in line with the funds available in the Budget. In the past period, elections were announced at two occasions, meaning that special regime for using the public procurement system is applied, which slowed down the spending dynamics. Therefore, it was necessary to make certain adjustments, Minister of Finance said.

He underlined that the positive trend of tax and contribution revenue collection was optimistic, since, in relation to the first two quarters in 2015, revenue collection increased, in particular by 6.4% as regards tax revenues and by 5.7% as regards contribution revenues.

He hoped such positive trend of tax revenue collection would continue in the coming period as well.

Minister of Finance said that budget deficit under the Supplementary Budget was also increased from the projected 3.2% to 3.6% of GDP, amounting to Denar 2.1 billion.

- We are striving for smooth realization of all functions of the Macedonian economy with the Supplementary Budget, Minoski said, adding that there is no delay and all government liabilities are paid on continuous basis.

When asked about the issuance of the Eurobond, he said that certain preparatory activities were undertaken and, in cooperation with foreign investment experts, market research was being carried out.

- Today we face a new situation with the Brexit referendum which will certainly reflect on the capital markets. We are closely monitoring the situation and, on the basis of the information we have on the trends on the capital markets, we will make adequate decision about possible issuance of Eurobond, which will contribute to increase of budget liquidity, but also for servicing part of the debt liabilities accrued on the basis of previously concluded loan agreements and issued securities, Minister Minovski said.

Supplementary Budget adopted by the Government will be submitted to the Assembly of the Republic of Macedonia tonight.