State approves new budget rebalance and €150 million borrowing

The government has carried out a second rebalance of the state budget this year while simultaneously approving fresh borrowing of €150 million, the Finance Ministry announced. Revenues and expenditures in the revised plan are reduced by more than €86 million, even as officials say the state will take on new external debt through a so‑called mini eurobond.

Borrowing, cuts and a tight end‑of‑year plan

With the new rebalance the plan is to collect a total of €6 billion by the end of the year, while expenditures are now projected at 6, 8 million euros. The package cuts capital investment allocations and reduces funds for the Ministry of Environment, the Administration for Execution of Sanctions (money earmarked for construction of prison facilities), and parts of the Finance Ministry.

Some planned foreign payments by the Ministry of Energy will not be carried out for the time being. At the same time the Health Insurance Fund (FZO) and the Ministry of Social Affairs received increased allocations. Authorities say another check of the state coffers could still take place before year‑end.

“Most likely there will be a reallocation sometime in December, whereby the funds that are not used in those institutions we will be able to reassign to where there is need, and that is from the Assembly,” said Minister of Finance Gordana Dimitrieska Kocoska.

The new borrowing decision, taken two days earlier, authorises a €150 million issuance via a mini eurobond at a 5.25% interest rate to repay external debt. Kocoska said the move fits the overall plan and that the amount might have been larger but market conditions required a smaller issue.

Officials say the new funds are needed to cover interest and principal: interest payments of about €100 million due by year‑end and roughly €53–54 million of principal. Other borrowings foreseen before year‑end were already included under the first rebalance, the minister added.

The rebalance leaves the budget deficit unchanged at a little over €750 million. Most of the deficit was spent in the first quarter of the year. While global uncertainty remains high, Kocoska does not expect adjustments to the GDP growth outlook, which stays at 3.5%, and inflation is now expected at 3.8%, lower than initially projected. She also said no corrections are planned for public debt.

To ease price pressures the government is acting through reduced excise and VAT on diesel. For now there have been no talks on additional measures, and officials say the fiscal room for new steps is limited.

Photo: press material from the event