The Government today adopted a proposed rebalancing of the 2021 budget, which increases the deficit projection to 6.5 percent of GDP, with 334 million EUR in additional spending – only half of that offset by new revenue projections.

Spending is projected to grow by 21 billion denars, or 344 million EUR, over the initial projection. Total spending for 2021 is now projected at 4.3 billion EUR. Meanwhile, revenue is predicted to grow by 163 million EUR, to a total of 3.6 billion EUR. The Government attributed this to current revenue flow and expectations for the rest of the year.

If this proposal is approved by the Parliament, the annual deficit will grow to 757 million EUR, or 6.5 percent of GDP.

The year is already off to a bad start, with the first quarter marking a GDP drop of nearly 2 percent. This dashed optimistic announcements from Prime Minister Zoran Zaev, who insisted that the economy will grow by 4.1 percent for the whole year.