September 2 (SeeNews) - Macedonia's government on Wednesday said it cut both revenue and spending targets in the country's 2009 budget by 3.2%, keeping the deficit forecast unchanged at up to 2.8% of the projected gross domestic product (GDP).
The budget revision, the second one so far this year, calls for budget revenue of 138.459 billion denars ($3.20 billion/2.25 billion euro) and spending of 149.594 billion denars, the government said in a statement on its website.
The first budget revision was conducted in April, when revenue and spending were both slashed by 9.0%.
Finance Minister Zoran Stavreski said in the statement the government will cover the projected budget deficit , initially forecast at 11 billion denars, with proceeds from Eurobond issues and foreign loans.
Macedonia has successfully placed its second Eurobond worth 175 million euro, as the issue was oversubscribed, the Finance Ministry said in July. The Eurobond that bears a coupon of 9.875% will mature in January 2013.
The average annual inflation forecast for 2009 was lowered to 0.1% from previously projected 1.0%, while the GDP growth forecast was revised to contraction of 0.6% from a previously projected rise of 1.5%, the statement said.
Stavreski added Macedonia may expect to see the first signs of its economic recovery in the fourth quarter of this year.
Macedonia’s August CPI fell by 1.4% on the year and was 1.3% down from a month earlier. The country’s economy contracted by 0.9% in the first quarter. No GDP figures for the second quarter are available.
Spending is being cut in all segments, including costs for salaries in the public administration that will be cut by 684 million denars or by 3% from the previous projection, as a wage hike of 10% planned for 2009 will be delayed. Capital spending was slashed by 18%. The government also said it will delay the supply of some 300 city buses to the capital Skopje.
The second budget revision is pending approval by parliament.
(1 euro = 61.4055 Macedonian denars)