North Macedonia’s government adopts 2020 budget, plans lower deficit of 2.3% of GDP

By bne IntelliNews November 12, 2019

North Macedonia’s government has endorsed the state budget for 2020, projecting growth of 3.8% driven by domestic consumption and a budget deficit of 2.3% of GDP.

The 2020 budget deficit of a total of MKD17.38bn (€282.6mn) is projected to be lower than that of 2019, which will come in at about 2.5% of GDP. The moderate deficit reduction will directly affect the stabilisation of government and public debt in the medium-term.

The growth of domestic consumption is seen at 3.3%, due to the wage hikes, higher employment and increased social protection of vulnerable groups of citizens.

Revenues in 2020 are seen at MKD222.3bn, 5.6% more than in this year's budget, and the expectation will be based on the moderate relaxation of the tax policy with adjustments of individual tax rates, which is expected to result in multiple effects, Finance Minister Nina Angelovska said.

Budget expenditures are projected at MKD239.7bn, up 5% from 2019.

The increase of wages is projected at 6.3% in 2020. The jobless rate is expected to fall below 16%.

Gross investments are planned to increase by 8% next year, boosted by investments in the public sector as well as support for investment activities of local and foreign companies.

North Macedonia's inflation rate is expected to stay low at 1.7%, which means a period of stable prices.

Angelovska said that the 2020 budget will be focused on human capital.

She explained that the Human Capital Index of North Macedonia calculated by the World Bank is 0.53, which means the country is lagging behind its neighbours. 

An index of 0.53 means that every young person born, living and educated in North Macedonia can reach only 53% of their full potential.

“In this regard, the 2020 budget will be focused on the human capital and on improving the conditions in which people can fulfill their potential,” Angelovska said.

The draft budget will be sent to the parliament for approval.

Related Articles

Bulgaria, Croatia may adopt the euro in 2023 if all reforms are implemented, ECB says

Bulgaria and Croatia, which have just joined the eurozone’s waiting room, the Exchange Rate Mechanism (ERM2), may adopt the euro by 2023 if they comply with all convergence criteria, Fabio ... more

Romania raises $3.3bn in US dollar-denominated Eurobonds

Romania's finance ministry tapped the international markets on July 7, selling $3.3bn worth of Eurobonds denominated in US dollars with maturities of 10 and 30 years. Romania previously issued ... more

Slovenian SID Bank’s €350mn “coronabonds” issue oversubscribed

Slovenia’s SID Bank successfully issued COVID-19 bonds worth €350mn on international capital markets, the bank announced on July 2.  The state-owned bank will use the funds raised to help ... more