IBNA Special Report
Skopje, May 29, 2014/ Independent Balkan News Agency
Budget expenses for the first quarter of 2014 have caused a high deficit. This was due to the elections, where the government spend an unplanned part of the budget to allocate subsidies for farmers, for the realization of several projects in the initial stage, but also to pay arrears to local companies.
According to the report of the Ministry of Finance, in the first four months of the year, revenues have amounted to 740 million Euros, while expenses amounted to 940 million Euros. Judging by these figures, deficit is extremely high. Until the end of the year, the government had forecasted a 300 million Euros deficit, far from the current figure for the first four months of the year.
But how will the government cover this high deficit caused especially as a result of the presidential and parliamentary elections?
Minister of Finance, Zoran Stavrevski says that the budget deficit is a result of seasonal factors. According to him, this period has seen the payment of subsidies and expenses on infrastructural projects, such as the start of the construction of two highways.
“Budget forecasts and expenses that have been made are part of the planning. The government will comply with the forecasted budget deficit of 3,5% of GDP. It will strictly comply planned deficit in spite of the realization of important capital projects, which imply the spending of high amounts”, says minister Stavevski. He says that there are no plans to revise the budget.
Experts on economic affairs say that the government wants to cover the deficit through different loans secured from international financial institutions.
“It’s possible to cover this entire high deficit in the very four months of this year. The government will certainly secure new loans in order to cover budget expenses, it will look into the possibility of the rebalancing of the budget and will not pay arrears”, says university finance professor, Mirlub Shukarov.
According to him, the government will not revise the budget, because it will openly admit that it doesn’t apply efficient budgetary policies.
He says that in order to cover large budget expenses, the government will apply measures of collecting taxes and apply other forms of collecting money from the citizens and businesses.
IMF mission too is concerned about the increase of budget deficit.
“A 3,5% economic growth in Macedonia is feasible, but the government must be careful in order not to increase budget deficit. The scope is for debt not to be increased a lot”, says the International Monetary Fund report following inspections of economic and financial trends in the country.
Based on the report, taxation policies must focus on preserving the 3,5% of GDP planned deficit.
“Keeping fiscal deficit under control is important for the stability of the budget”, says the representative of IMF for FYR Macedonia, Vladakova Holar.
The government hopes that summer, with the arrival of emigrants home, will reduce deficit, because more money will enter the country. According to the Popular Bank of Macedonia, every year, emigrants bring around 800 million to 1 billion Euros into the country. /ibna/