Macedonia Overspend Blamed on Elections
Experts advise belt-tightening in Macedonia after data revealed a drastic overspend in the first quarter of the year, attributed mainly to the local elections.
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| Macedonian Government | Photo by: Sinisa Jakov Marusic |
Concern about the pace of public spending comes after a report from the Finance Ministry revealed that the government in the first three months spent much more than it cashed in as budget revenue.
In January, February and especially in March, the month of the local elections, the government made a cumulative budget deficit of some 186 million euro.
This is roughly 65 pe rcent of the entire envisaged annual budget deficit, projected at 288 million euro.
Experts advise tighter fiscal discipline.
“It is clear that in the first three months, the government boosted spending owing to the local elections. It will now have to increase the planned deficit or it should opt for austerity. There is no other way,” academic Abdulmenaf Bexheti said.
For this year, the government envisaged a budget deficit of some 3.5 per cent, which experts deem over-optimistic.
For the most part, the deficit is to be serviced with the 250-million-euro loan that the country took from Deutsche Bank. The rest is to be financed by issuing state bonds.
But after the latest overspend, some advice tigher fiscal discipline.
“Public spending in our case does not correspond with economic growth,” economics professor Miroljub Shukarov told the daily Utrinski Vensik, adding that, “We should spend what we produce”.
In February, Macedonian industrial output rose for the first time in 13 months, boosting hopes that the country is exiting a prolonged economic downturn. The positive trend continued in March with 4.5 per cent.
However, the World Bank in its latest report predicts another difficult year ahead for the whole of Southeast Europe, forecasting only a slow recovery in the region’s economies.
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