Socio-Economic Impact Assessment

ACTUAL BUDGET AND PROJECTIONS

Budget revenues are rapidly declining and sizeable shortfalls relative to budgeted amounts are expected in the 2020 Supplementary Budget. Compared to the Actual Budget for 2020, government revenue is now expected to shrink by some 415 million EUR, which is a reduction of 11.5%. In absolute terms, the largest revenue shortfall is expected in VAT (net of refunds) revenue (125 million EUR), revenue from excises (90 million EUR), and revenues from corporate income tax (88 million EUR). In relative terms, the corporate income tax revenue is likely to fall by a staggering 33.8%, indicating a stark deterioration of profitability. The pandemic is likely to lead to increased debt and deficits beyond those recorded in the Global Financial Crisis of 2009.

Actual budget per month

Steady decline across
all categories of budget revenue
until May 2020

Cumulative deficit until August 2020
is 35 billion MKD
or 5.3% of GDP

The second supplementary budget
2020 foresees a
budget deficit of 8.4% of GDP

Fiscal Data – Revenues

Total budget revenues in the second
supplementary budget for 2020
are projected at 196 billion MKD

Planned revenues are 11.5%
lower compared to the
original 2020 budget

The 2nd supplementary budget 2020
foresees increase of 2.5%
in Social Services Contributions

Fiscal data – Expenditures

Capital expenditures were
reduced by 22.5%
from the original 2020 budget

Significant cuts were made to non-essential and non-priority expenditures in
amount of 3.1 billion MKD

The four packages of economic measures required
an increase in transfers of 13.9%