September 20 (SeeNews) - Macedonia's government has adopted the budget draft for 2017 with deficit projected at 3% of the planned gross domestic product (GDP), the finance ministry has said.
Economic growth is forecast at 3% in the budget draft, the finance ministry said in a statement late on Monday. Macedonia's GDP is planned to grow by 2.3% this year, following July revision of the 2016 budget.
The planned 2017 deficit of 18.6 billion denars ($337.9 million/302 million euro) is lower than the shortfall of 23.1 billion denars equivalent to 4% of GDP projected in the latest revision of 2016 budget that was approved by parliament earlier on Monday.
Macedonia's government plans record high capital investments of 26.95 billion denars next year, an increase of 20% over 2016. The planned investment will back the construction of Demir Kapija - Smokvica motorway section, as well as the modernisation of the railway section of transport Corridor 10 in Macedonia, and the reconstruction of the railway to neighbouring Bulgaria.
Macedonia's government led by conservative VMRO-DPMNE party, plans to collect 187.6 billion denars in budget revenue next year, an increase of 7.6% over 2016. Budget expenditure is forecast to reach 206.22 billion denars, up 4.5% compared to 2016.
Finance minister Kiril Minoski commented on the planned 2017 GDP growth: "I believe this is a realistic projection as it reflects the global economic growth forecasts for next year, the Brexit effects which will slow down the economic growth of the EU countries, as well as the expectations for the domestic situation related to the resolving of the political crisis after the parliamentary elections."
"The economic growth will be driven by exports, which will record a real growth of 6%. Imports are projected to increase 4.7%, and thus the net export would contribute slightly to the economic growth," Minoski added.
Private consumption is planned to rise 2.1%, while public consumption will be 1.3% higher than in 2016.
According to the budget draft, inflation is projected to hover around 1%.
The government assumes that the employment rate will rise by 1.8% next year.
Tax revenue is expected to increase 9.5% compared to 2016, as customs revenue will add 2.5%, according to the draft. Collected profit tax is planned to rise by 16.1%, revenue from Value Added Tax to increase by 10% and excise revenue to grow by 12.7%. Budget revenue from personal income tax is projected to increase by 9.3%.
On the expenditure side, the government plans wage payments of 26.77 billion denars, 92.7 billion denars will be allocated to social transfers and pension payments will total 51.2 billion denars.
(1 euro=61.5764 denars)