Macedonia To Cut Spending in June

The Ministry is currently holding consultations with relevant institutions and will soon arrive at its final figure, he said at the "Free Market Road Show" conference held on Wednesday in Skopje.

"We are still making analyses and at this stage I can only say no institution or project will be exempt. There will be cuts within all institutions and almost all projects but that doesn’t mean that we will fail to complete a single project by the year's end," Stavreski insisted.

The current budget projection foresees a total revenue of €2.34 billion and expenditures of €2.51. The €170 million deficit is projected at 2.5 per cent of GDP.

Increases in the revenue and expenditure sides amount to 3.4 and 2.8 per cent respectively. The government foresees GDP growth of 2 per cent, with an annual inflation rate of 2 per cent.

The opposition parties have criticised the government for its overspending in a crisis year, saying that most of the money should be cut from non-productive projects such as building monuments, sports stadiums and museums.

Another participant at yesterday’s conference, Tome Nenovski, a professor at the Skopje based American College, stressed that balancing the budget was common in the middle of the year, especially in a year when the effects of the global economic meltdown are still being felt, along with the recent debt crisis in neighbouring Greece.

"I believe the budget cuts will be about €20-150 million, but the situation changes on a daily basis and it would not be a surprise if a new rebalance is required sometime in September," Nenovski said.

Last year Macedonia’s economy suffered greatly from the global financial crisis. Macedonia’s 2009 economic growth dropped from almost 6 per cent the year before to minus 0.7 per cent. As a result the government has pledged to freeze salaries and adjust hiring practices in the public sector.