June 27 (SeeNews) - Macedonia's government approved a budget revision raising the budget deficit to 3.6% of the planned GDP from 3.2% of GDP due to the prolonged political crisis in the country, the country's finance minister.
The revised budget draft envisages economic growth of 2.3%, down from 4% expected earlier, finance minister Kiril Minoski said on Friday. A video of his speech was posted by news portal daily.mk.
The revised budget lowers planned revenues by 2%, or 3 bln denars ($53.8 million/48.8 million euro), Minoski also said. They were initially budgeted at 177 billion denars.
Expenditures are projected to be 804 million denars lower than an initially planned 196 billion denars.
In a separate statement published by the government on Sunday, the finance minister said total revenues collected in the first half of the year are estimated to be 4.4% higher than in the like period a year earlier, with tax revenues posting an annual growth of 6.7%.
Minoski noted that although capital expenditures are slightly lowered in the revised budget, the big investment projects will proceed as planned. Funding for major projects such as the construction of the 28 km long motorway section Demir Kapija - Smokvica, worth 271 million euro, and the project for the country's gasification could be even increased.
Minoski also confirmed the government's intentions to issue a Eurobond but did not provide any further details.
"The Eurobond would provide additional funds in the budget and thus would ensure more liquidity, which would release additional funds in the banking sector, to be then invested in the economy," the finance minister said.
Macedonia has been locked in a political crisis since January 2015. Back then the leader of the opposition SDSM Zoran Zaev accused the coalition government of the conservative VMRO-DPMNE and ethnic-Albanian DUI of corruption, wiretapping illegally more than 20,000 people and covering-up a murder. For its part, the government charged Zaev with trying to destabilise the country.
In an attempt to solve the political deadlock, the main political parties, with the mediation of the EU and the US, signed the Przino agreement last July, calling early elections for April 24. The polls were later postponed for June 5 under pressure from the EU and the US, which insisted that Macedonia needed more time to meet the international community's requirements for organising credible elections. On May 18, Macedonia's parliament cancelled the June 5 vote, without setting a new date.
($=55.7200 denars)