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Macedonia Passes Budget Rebalance
Skopje | 05 June 2009 | Macedonia’s Parliament Thursday adopted a budget rebalance proposed by the government aimed at cutting revenue and expenses amid the global economic downturn.
Hit hard by the global financial crisis, Macedonia has been forced to consider an approximately nine per cent cut in its 2.5 billion euro budget for this year.
Total budget revenues this year have been reduced by 166 million euros, with expenditures reduced by about 168 million euros. The total deficit for this year is projected at 187 million euros.
In this way the government hopes to maintain the continuity of GDP growth and to evade recession. Through the downward revision of macroeconomic policies, the government expects a 1 per cent GDP growth, down from the initial 5 per cent projection. In comparison, last year’s GDP rose to 5.5 per cent.
The government projections include a negative trend in industrial production projected at -7.5 per cent as many of the country’s landmark metal, construction and textile industries fight to survive.
The budget deficit is to amount to 2.8 per cent, trading deficit at 26 per cent, and the current account deficit at 11 per cent. Moreover, the unemployment rate is to increase from already the staggering 34 per cent to 34.5 per cent. Inflation is expected to amount to about 1 per cent.
However, experts from the International Monetary Fund, IMF, warn that the figures may be even more disappointing. The world body warns of a recession of -2 per cent and of growing budget and current account gaps that surpass government forecasts.
(Reporting by Sinisa-Jakov Marusic) Source: Balkaninsight
