North Macedonia’s government has endorsed the state budget for 2020, projecting growth of 3.8% driven by domestic consumption and a budget deficit of 2.3% of GDP.
The 2020 budget deficit of a total of MKD17.38bn (€282.6mn) is projected to be lower than that of 2019, which will come in at about 2.5% of GDP. The moderate deficit reduction will directly affect the stabilisation of government and public debt in the medium-term.
The growth of domestic consumption is seen at 3.3%, due to the wage hikes, higher employment and increased social protection of vulnerable groups of citizens.
Revenues in 2020 are seen at MKD222.3bn, 5.6% more than in this year's budget, and the expectation will be based on the moderate relaxation of the tax policy with adjustments of individual tax rates, which is expected to result in multiple effects, Finance Minister Nina Angelovska said.
Budget expenditures are projected at MKD239.7bn, up 5% from 2019.
The increase of wages is projected at 6.3% in 2020. The jobless rate is expected to fall below 16%.
Gross investments are planned to increase by 8% next year, boosted by investments in the public sector as well as support for investment activities of local and foreign companies.
North Macedonia's inflation rate is expected to stay low at 1.7%, which means a period of stable prices.
Angelovska said that the 2020 budget will be focused on human capital.
She explained that the Human Capital Index of North Macedonia calculated by the World Bank is 0.53, which means the country is lagging behind its neighbours.
An index of 0.53 means that every young person born, living and educated in North Macedonia can reach only 53% of their full potential.
“In this regard, the 2020 budget will be focused on the human capital and on improving the conditions in which people can fulfill their potential,” Angelovska said.
The draft budget will be sent to the parliament for approval.
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