SDSM warns of €900m+ budget gap as government holds projections

Opposition party SDSM has warned that North Macedonia could face a budget shortfall of more than €900 million and growing strains in the pension system, while the government says it will keep the deficit and growth projections unchanged through the end of the year.

Ministry says projections stand; opposition fears deeper hole

Finance Minister Gordana Dimitrieska-Kochoska, speaking from New York on September 24, 2026, told Macedonian Television that the Ministry of Finance is monitoring developments closely and does not expect to revise the growth rate or the budget deficit before year-end. “Until the end of the year we do not expect significant changes and we remain on the projection we had, especially considering that the growth rate in the second quarter is 4.3 percent. And with regard to the budget deficit, what is projected for us will remain, regardless of whether we do a rebalance or do not do a rebalance,” she said.

She added that, should the government choose to rebalance the budget, it would combine that move with measures on both revenue and spending. “If we decide to do a rebalance of the budget, at the same time we will work on cuts on both the revenue and expenditure sides. If we remain in the same situation as now, the deficit will not go beyond what is foreseen, and at the same time the indebtedness, because that too is part of the rebalance that passed in Parliament and these are some boundaries within which the Ministry of Finance must operate,” Dimitrieska-Kochoska said, noting she attended the “Promoting growth in the new economy” session held under the World Economic Forum’s Meetings for Impact on Sustainable Development 2026.

Official statistics cited by the Ministry show rising exposure: net external debt stands at €4,763 million, with a quarterly increase of €30 million. Gross external debt in the first half of 2026 rose by €1.03 billion and reached 71.4 percent of GDP, while net external debt increased to 25.9 percent of GDP. External claims are higher by €718 million compared with the end of 2025.

SDSM says those trends point to deeper problems in both the central budget and the Pension and Disability Insurance Fund (PIOM). The party claims that the combined gap in the budget and PIOM could top €900 million — more than 5 percent of GDP — because revenues are underperforming while expenditures grow and the state increasingly covers needs via domestic and foreign borrowing.

SDSM leader Venko Filipche warned at a local event in Aerodrom that the PIOM shortfall has doubled in two years. “The hole in the pension fund, which in two years has doubled from 500 million euros, is now one billion euros. One billion euros are missing to pay pensions. They are not in the pension fund. The state must provide them. When the economy is not working, where will it find the money? From loans,” he said. He added that continued reliance on “expensive loans” risks pushing the economy into a crisis similar to Greece decades ago.

Ruling party VMRO-DPMNE rejected the opposition’s claims and pointed to recent pension increases and regular payments as proof of stability. “Under the VMRO-DPMNE government pensions are higher, payments are regular, and the state provides the necessary funds for the stable functioning of the system. Pensioners deserve security and a dignified life, not political games with their livelihoods,” the party said.

Photo: press material from the event