Gordana Dimitrieska-Kochoska: Investment support and gradual fiscal consolidation

Gordana Dimitrieska-Kochoska said the country must preserve the current investment cycle while pursuing gradual fiscal consolidation, arguing both goals can be balanced without derailing growth. She made the remarks at the panel discussion “From the pressure of the eurozone to fiscal resilience: Budget priorities, realities in the private sector and regional lessons” during the regional conference Ohrid 2026.

“We have an investment cycle that must be maintained. For 10 consecutive quarters we have recorded growth rates of 3 percent and above, and in the latest quarter growth reached 4.3 percent,” Dimitrieska-Kochoska told the audience, using these figures to underline that the economy is moving on a positive trajectory.

Balancing support for investment with fiscal discipline

She argued that support for investment should go hand in hand with a gradual fiscal consolidation that remains a priority for the Ministry of Finance. Translating her assessment into practical budget choices, she warned that some flexibility on deficit targets may be necessary to sustain longer-running investment projects.

“The question is whether you should aim to have a budget deficit equal to what you planned. Or perhaps a small deviation is needed from what you projected in order to support the investment cycle that lasts for a longer period. And that was one of the biggest challenges we had as the Ministry of Finance when preparing the latest budget rebalance. Our decision, of course, was that we will balance. On one hand, definitely, we will shift part of the budget deficit upwards, considering that most of that deficit will go to financing projects that will add additional value to the economy, but at the same time we will carefully work on the revenue side, because fiscal consolidation is not only a focus on expenditure,” she said, describing the ministry’s approach to the most recent revision of the budget.

Dimitrieska-Kochoska also recalled that North Macedonia faced a large budget deficit in 2020 and that consolidation did not proceed as quickly in 2021, slowing the overall fiscal adjustment. She noted additional pressures from payments tied to legally acquired rights that had not previously been budgeted.

On the priorities going forward she underlined the link between consolidation, sovereign ratings and borrowing costs. “Fiscal consolidation must be a priority because in the end it will affect the credit rating, it will affect interest rates in the future. That means it must be a priority, but not at any cost for how quickly we achieve it. We should not rush to achieve fiscal consolidation — a budget deficit below 3% and public debt under 60% — at the expense of disrupting investments,” Dimitrieska-Kochoska said.

Photo: press material from the event