The Fiscal Council has approved the budget rebalancing but voiced significant concerns. Gligor Bishev, president of the Fiscal Council, highlighted that the current high share of budget expenditures in the gross domestic product (GDP) is unsustainable in the long term.

Bishev pointed out that the planned pension increases of 2,500 denars each year will deepen the pension deficit that the budget must cover. He also emphasized that the debts of public enterprises should be included in the public debt calculation, and the budget for public prosecutions needs to be increased as it is the smallest in the region. These remarks were directed at Minister of Finance Gordana Dimitrieska-Kochoska, who defended the rebalancing before the Commission on Financing and Budget, with input from Bishev, Silvija Janevska from the Judicial Budget Council, and Ljupco Kocevski, the public prosecutor of the Republic of Macedonia.

– Our net exports are decreasing. Last year we had a coverage of 75 percent of imports with exports, now 70 percent. As a small and open economy, we cannot stimulate growth with domestic consumption alone. Our personal consumption will grow by 2,5 percent, gross investments by around 10 percent, but in the end the growth will be 2,1 percent. Therefore, in order to ensure greater growth, the focus should be on net exports – said Bishev.
Minister Dimitrieska-Kochoska stated that the rebalanced budget projects revenues of 5.17 billion euros, an increase of 133 million euros from the initial budget. Expenditures will rise to 5.9 billion euros, an increase of 322 million euros. Initial economic growth projections for 2024 of 3.4% have been adjusted to 2.1%, and the rebalancing reflects this.

Bishev welcomed the rapid rebalancing in alignment with new macroeconomic trends and Germany’s slow growth. However, he warned that the current budget expenditures, comprising 40 percent of GDP, are unsustainable. Despite reassurances from the Minister of Finance about pension increases, Bishev noted that an additional 4 billion denars (about 25.8 million euros) will be needed over the next 420 years, significantly increasing current state pension subsidies, which already account for 30 percent.

He also pointed out that the cumulative outstanding liabilities of public enterprises amount to 500 million euros. If these are included in the public debt as per EU requirements, the public debt will reach 65.66%.

Judicial Budget Council: Insufficient Funding Provided
According to Silvija Janevska, the Judicial Budget Council, by law, should receive a budget equivalent to 0.8 percent of GDP. However, this has never been fulfilled, and in recent years their budget has only been 0.3 percent of GDP. With the rebalancing, their budget has been reduced by MKD 56.6 million.

Janevska highlighted that the most significant cuts are in capital projects scheduled for the summer. Additionally, no funds have been allocated for employee allowances, which she stated would be a serious problem.

Prosecutor’s Budget: Smallest in the Region
The basic funds for the prosecution have been reduced by over 1 million euros. Public prosecutor Ljupco Kocevski expressed concerns that these cuts jeopardize the regular work of public prosecutors, affecting investigative actions, expert reports, and vehicle maintenance.

Kocevski emphasized that the budget share for prosecutors in North Macedonia, at 0.22%, is the lowest in the region. In comparison, Montenegro allocates 0.36%, Serbia 0.41%, Kosovo 0.52%, and Bulgaria 1.8%.