The Government projected next year's tax revenues to exceed those of 2005 by 3.5 billion denars, or 6.6 percent, as a result of the higher growth rate, which is projected at 4 percent in 2006, and of the better tax collection by the Internal Revenue Service and the other bodies. In addition, the fiscal and monetary discipline, keeping salaries under control and maintaining a fiscal deficit of 0.6 percent of GDP will continue. This has been agreed between the Macedonian negotiating team and the IMF mission over the past few days.
The focal point of their talks was Macedonia's 2006 budget. The central budget's investments have been projected at about 2 percent of GDP, and the country's foreign debt is expected to further decrease. The overall revenues of the budget including the funds are expected to amount to 103 billion denars.
"A priority of the Macedonian Government next year is keeping fiscal and monetary discipline. The IMF backs the commitment to limiting the central budget deficit to 0.6 percent of GDP. It's crucial that you attain this target and it won't be easy considering that 2006 is an election year," IMF Head of Mission for Macedonia Mark Griffiths said on wrapping up his first round of talks with Macedonian government officials.
The IMF is satisfied with Macedonia's realization of the set goals of the new arrangement. Accumulation of health sector debts is the only thing that concerns the Fund.
"All the projections by end-September had been met, except for one. I'm worried about the health sector debt. We're still checking the information, the process is incomplete yet, but there are indications that this sector's debt is on the rise," Mr. Griffiths said.
As for the monetary policy, National Bank Governor Petar Gosev explained that the inflation rate was within limits and has been projected at around 2 percent in 2006. He said there was no reason for rushing into forecasts of declining interest rates and explained that next year the Central Bank's bills would gradually be replaced with government bills for monetary purposes.
