Under the Zaev regime, starting with mid 2017, the Macedonian public debt has increased by two billion EUR. With this, Macedonia is about to move from the rank of moderately to highly indebted country.
In Q2 2017, the last quarter before SDSM’s power-grab, Macedonia had a public debt of 4.7 billion EUR, or 46.1 percent of its GDP. Now, little more than three years later, the debt level smashed through the 60 percent limit and reached 6.5 billion. It’s fueled by the easy spending policies both before but especially after the start of the coronavirus epidemic, and just in 2020, the budget deficit is set to reach almost a billion EUR.
World Bank criteria declare a country moderately in debt if it has a public debt between 40 and 60 percent of GDP, and those over 60 percent are considered highly indebted. But the criteria not necessarily apply for poorly developed countries like Macedonia, who have far fewer resources to service the debt they have than developed countries. IMF has asked Macedonia to keep its debt levels below 50 percent of GDP.
Macedonia has a half a billion EUR bond maturing in mid 2021, on top of other debt that is coming due. The economy is forecast to drop 4.4 percent in 2020, meaning that the public debt as share of GDP may drop slightly, but that’s of little comfort.