The ongoing revision of the budget is likely to also provide funding for new relief packages to help the country overcome the crisis, according to Minister of Finance Fatmir Besimi in a recent op-ed. Minister Besimi wrote the crisis was an “aftershock” of the pandemic, transmits MIA.
International financial organizations, however, were predicting that the global and local economies would grow in 2022, he said.
“The Ministry of Finance is already consulting with the institutions on project implementation levels and current expenditures,” Besimi said.
“We will be extremely conservative. Wherever we can, we will make budget cuts. This way, we will make more space for new relief packages, which, given the situation, will probably be necessary again.”
The finance minister noted that North Macedonia’s government’s response to the crisis had been one of the strongest in the region.
“Since the crisis began, the government’s response has amounted to 615 million euros in relief packages for the economy and citizens,” Besimi wrote, adding that Croatia had allocated about 635 million euros, Greece 500 million euros, and Slovenia and Albania around 200 million euros each.
“Our goal as a government is to support citizens — the vulnerable categories first of all — and to maintain the health of the economy, to overcome this crisis, and then to go back to our goal of higher, sustainable rates of economic growth.”
Besimi said the war in Ukraine had posed a dilemma for policy makers. Having to deal with back to back crises, he noted, they faced a challenge in reaching their three goals: crisis management, growth maintenance, and fiscal consolidation.
“The International Monetary Fund and the World Bank have recommended that fiscal policy be adjusted according to the degree of economic exposure to the war in Ukraine, the state of the pandemic and the course of economic recovery,” Besimi wrote.
He said many countries’ debts have reached record highs amid the pandemic.
“Also, as a result of the central banks’ response to price pressures through tightening monetary policy, governments are facing high interest rates in capital markets,” he added.
However, he pointed out, the need for consolidation should not prevent governments from prioritizing appropriate relief packages to protect vulnerable categories of citizens and the economy.
The finance minister said the government was tackling the challenge from “three aspects of the budget: regarding expenditures, through cuts and reprioritization; regarding revenues, through reforms for greater efficiency and consolidation; and regarding financing, through sustainable instruments.”