Minoski: Capital investments remain at the highest level so far

Capital investments are at historically the highest level so far, regardless of the Supplementary Budget. In an interview for TV Nova, Minister of Finance, Kiril Minoski, said that capital investments remained at higher level within the Supplementary Budget compared to 2015, no capital project was going to be halted under the Supplementary Budget, while as regards the projects undergoing an intensified pace of implementation, there would be additional funds provided, such as for instance, Demir Kapija – Smokvica highway and the gasification project.

“Total amount of funds under the Supplementary Budget, in particular regarding the infrastructure projects, are not reduced, but are rather increased, while the main cuts have been made regarding the costs related to goods and services. All projects will continue to be implemented”, Minoski said.

Minister of Finance Minoski added that the two attempts to hold the elections in the first half of this year affected the pace of realization of the capital projects, since, pursuant to the legal provisions, no public procurement could be carried out in a pre-election period.

As for the announced Supplementary Budget, Minovski reiterated that semiannual revision of revenue and expenditure projections was a regular activity undertaken in all economies and a practice not being introduced for the first time in Macedonia. He went on by saying that, as regards the generated revenues, there was a positive trend in relation to last year, i.e. total revenues surged by around 4.4%, while tax revenues experienced a 6.7% increase. However, considering the prolonged political crisis, caution had to be taken and both revenue and expenditure projections had to be revised.

“Past year was an extremely difficult period for Macedonia, since we faced two crises. One is the political crisis still ongoing, and the second one is the migrant crisis – one of the largest following the Second World War in Europe. Such political crises have certain implications on the economic activity, hence even the more developed economies would face a slowed down growth”, Minoski stated.

Minoski also underlined that all countries having budget deficit would have to have internal or external sources of financing it.

“Government securities are issued since 2004, the first Eurobond being issued in 2005. These are instruments used to finance the deficit. In the period so far, the opposition criticized us when we used government securities, which we issued on the domestic market, because we withdraw funds from the banks which would possibly be used for crediting. Now, when we want to provide additional funding on the international capital market, we are being criticized again. The Eurobond is used to provide additional funds in the Budget, which are to contribute to additional liquidity, subsequently providing for additional funds to be released in the banking sector which, on the other hand, would be extended to the economy”, Minoski said.

He pointed out that the Macedonian economy had faced number of challenges in the past two decades.

“This Government has a clear benchmark of what it wants to achieve in Macedonia.   Our number one priority is job creation in the country. Hence, numerous activities have been undertaken to that end. “Macedonia Employs 2” Project was announced few days ago, and we expect for 20,000 new jobs to be created. Investments are another priority, hence number of activities are being undertaken in terms of attracting foreign investments. As for the domestic investors, what we apply is low tax policy, i.e. returning most of the funds to the Macedonian economy, the private sector. Continuous improvement of the business environment is yet another policy. These are the priorities. Therefore, we are going to intensify our efforts to that end, i.e. towards creating an environment to foster favourable conditions for both growth and development”, Minoski explained.