Macedonia's outgoing government has adopted a revision of its 2015 budget, boosting the deficit target to 3.6% of GDP from 3.3%, chiefly on the back of higher expenditure, the finance ministry said in a statement. It also lowered its economic growth forecast to 3.5% from 4%, citing the political crisis, which deteriorated in Q2 and uncertainties concerning the debt crisis in neighbouring Greece.
Ahead of the snap polls scheduled for April 2016, the cabinet raised its total expenditure target by MKD5.2bn to MKD187bn. The increase comes mainly from current expenditure, which has been lifted by MKD4.1bn.
At the same time, total revenue projections have been increased by MKD3.6bn to MKD166.9bn, as the government expects to collect MKD6.1bn more in taxes despite the weakening growth. The projected non-tax and capital revenues, as well as contributions were all lowered.
The deficit target has thus been revised to MKD20.1bn from MKD18.5bn.
Macedonia's budget deficit narrowed by a real 40.3% y/y to MKD7.9bn in January-May, with revenues up 14.8% y/y to MKD65.9bn and expenditure up 4.5% y/y to MKD73.8bn.
The country’s GDP grew 3.2% y/y in Q1 and 3.8% in 2014. Earlier this month, the International Monetary Fund (IMF) cut its 2015 GDP growth forecast for Macedonia to 3.2% from the previous 3.8%.
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