Sunday, 29 November 2020 | News today: 0

Government adopts its budget proposal for 2017: Record capital investment, economic growth, increased pensions

%d0%b1%d1%83%d0%b3%d0%b5%d1%82

Macedonian Government adopted its budget proposal for 2017. At a session on Monday, the Government decided that the budget would increase capital spending by 20 percent compared to 2016, up to 426 million EUR.

Overall, projected budget revenues are at 3,06 billion EUR, and spending is planned to reach 3,37 billion EUR. Revenues should grow by 7,6 percent compared to the 2016 levels, and spending is projected to increase by 4,5 percent.

“The budget was prepared based on a projected economic growth rate of 3 percent. We believe that this is a realistic projection, as it incorporates expectations for global growth rates. The budget also provides for the expected Brexit effects that could slow down growth in the European Union. as well as expectations for improvements in the domestic political scene, where the political crisis should be resolved following the December early elections. Economic growth will be driven by exports, which are projected to grow by 6 percent, and imports should also grow, by 4,7 percent”, said Finance Minister Kiril Minoski.

Gross foreign investments in Macedonia are expected to grow by 4,5 percent, and spending should grow by 2,1 percent. The inflation rate is projected at 1 percent, and employment is forecast to grow by 1,8 percent, the same rate by which average salaries should increase. By revenue source, the projections prepared by the Finance Ministry foresee an increase in salaried taxes by 9,3 percent, income tax revenue should grow by 16,1 percent and the consumer value added tax should bring in 10 percent more funds into the budget.

“In terms of fixed spending, we provide for 426 million EUR for salaries, and 1,5 billion EUR for welfare transfers. This includes the effects of the new retirement and welfare spending. Retirement spending alone will amount to 836 million EUR. Unemployment benefits will cost 14 million EUR and active employment measures will cost about 9 million EUR. Public healthcare spending will amount to 432 million EUR”, Minoski added.

In capital investments, the funds will be used to complete the main Corridor 10 highway between Demir Kapija and Smokvica and to work on both the first and second stage of the railway link toward Bulgaria. Capital spending will also include work on the national inter-city gas pipeline network, the first stage of which was completed in 2016.

As elections are set in December, Minoski was asked whether the Ministry believes it is better to pass the overall budget, or to introduce temporary mechanisms and leave the budget to the next Government. Minoski said that the Ministry is tasked with preparing the budget in time, and it is up to the members of Parliament to  decide when and whether to pass it.