The 2022 draft-Budget brings development and increased capital expenditures by 27 percent compared to last year. Unproductive expenditures have been reduced, while salaries in healthcare, education, culture, judiciary, prosecution are set to rise, said Finance Minister Fatmir Besimi in the elaboration of the draft-Budget on Tuesday.
Minister Besimi expects the draft-Budget to be timely adopted despite the political crisis in the country. “The Government adopted the draft-Budget in time and the document has been forwarded to the Parliament, so I see no reason why it would not be passed. The largest opposition party has also announced it would review the document,” Besimi told a press conference.
Total expenditures are projected at Mden 272,4 billion (EUR 3,89 billion), while revenues at Mden 238,9 billion (EUR 4,4 billion). The deficit stands at Mden 33,5 billion (EUR 545 million). Total revenues are 7.4-percent higher compared to 2021, while expenditures are up by only 1.4 percent compared to last year. There are cuts in unproductive expenditures, such as the six-percent reduction in the section of goods and services. “The deficit will be used solely to support the more significant part of the capital investments, which amount to Mden 37,8 billion (EUR 613,9 million). Capital expenditures are higher compared to the budget deficit, which means that the 2022 budget brings development,” noted Besimi.
The deficit and the debt repayment in the amount of Mden 11,6 billion (EUR 188,4 million), of which Mden 6,1 billion (EUR 99,1 million) for the external debt and Mden 5,5 billion (EUR 89,3 million) for the government debt, are to be funded through a combination of domestic and foreign borrowing while considering optimization of borrowing costs. New facilities will be introduced as sources for the deficit financing, such as green bonds and inflation-indexed bonds within the Accelerated Economic Growth Plan.
Capital expenditures rise by 27 percent compared to 2021 and their share in the total expenditures amounts to 14 percent, the highest on record. The inflation rate is projected at 2.4 percent and the pressure of the energy crisis is expected to drop in the second half of 2022. Gross investments are projected to rise by 8.5 percent while consumption by 3.1 percent. In addition, exports are expected to increase by 8.3 percent, with positive trends on the labor market through a 3.1-percent growth in the number of employees, thus affecting the unemployment rate.
Subsidies will be paid in the agriculture sector, along with increased support for the private sector, active employment measures, fiscal decentralization, and healthcare. The budget’s four fundamental objectives are continued care and protection of public health, economic recovery, increase of investments and financing of state’s basic functions. It is designed on the basis of projections on global economic trends, especially those of Germany as North Macedonia’s biggest economic partner.
Source: MIA
