PM Nikola Gruevski announced that the preparation of the next year’s budget is at a final stage and it envisages a deficit of 3.5% of GDP, a release on the government’s website informs. The budget is based on projected GDP growth of 3.2% and inflation of 3.3%. The PM commented that the government will continue the policy of increasing the capital investments for large infrastructure projects.
Gruevski also said that the cabinet plans to increase pensions, welfare and public sector salaries by 5% next year. The pensions and social benefits will rise as of March, and the salaries will go up as of October.
As a percentage of GDP, the deficit target for next year is equal to the still effective target for this year. However, it is likely that the full-2013 deficit outcome will exceed 3.5% of GDP. We remind that the budget deficit was already at 2.9% of GDP in Jan-Jul 2013. In the first seven months of this year, total budget revenues decreased by 1.9% y/y in real terms to MKD 80.7bn (EUR 1.3bn), while total expenditures rose by a real 2.8% y/y to MKD 95.1bn. Previously, deputy PM and minister of finance Zoran Stavreski said that the decision whether this year’s budget will be revised will be made in September and will depend on the performance in August.
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