At a meeting of the Parliamentary Committee on Financing and Budget, where the second revision of the 2026 Budget was reviewed, SDSM MP Fatmir Bytyqi said the only consistent feature of the current government’s economic policy was the lack of stability in its fiscal plans.
He pointed out that in less than ten months, the government had presented three different budget plans, while the deficit remained far above the initial forecast and funding for capital investment was declining.
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“In ten months, we have had three budget frameworks and the same leader continues to assure us that everything is going according to plan. It seems that the only constant in this government’s economic policy is the instability of its budget plans. People have long said, ‘Measure twice, cut once.’ This government, it seems, cuts first and then measures how badly it has miscalculated. And it has done so three times. But citizens, not those who made the decisions, pay the price for every mistaken measure,” Bytyqi said.
He recalled that the budget deficit, initially set at 39.239 billion denars, or 3.5 percent of GDP, rose to 46.264 billion denars, or 4.1 percent of GDP, in the July revision, and remained unchanged in the October revision.
Meanwhile, capital expenditure fell from 45.879 billion denars to 40.124 billion denars, a decrease of 5.755 billion denars. Including the separate KAPEF component, the overall reduction in the capital component amounts to around 6.3 billion denars.
According to the MP, this reallocation of funds confirms the Fiscal Council’s warning that the additional deficit is no longer essentially being used for capital investment, but instead is going toward covering day-to-day expenses.
“In July, you justified the increase in the deficit by claiming you were securing additional funds for capital investment. That was the main development argument for widening the fiscal gap. This brings us to the fundamental reversal. Capital investment has almost returned to its initial level, but the deficit remains seven billion denars higher than in the original plan. In July, we borrowed more, supposedly to invest more. In October, investment fell, borrowing remained, and the government continued to talk about development,” Bytyqi said.
Turning to development priorities, he noted that the budget revision cuts funding from the core budget for small and medium-sized enterprises, technological-industrial development zones, foreign investment, balanced regional development, as well as the energy sector and educational infrastructure.
The SDSM MP also warned of a decline in foreign direct investment flows, which fell from 218.6 million euros in the first quarter of 2026 to just 18.7 million euros in the second quarter.
He added that pension costs were rising, but nominal increases did not automatically translate into greater purchasing power. At the same time, the pension fund’s growing reliance on transfers from the state budget called the system’s long-term sustainability into question.
“Interest payments, unlike capital investment, have a major advantage: they do not depend on the government’s ability to implement projects. They come in regularly, even when development falls behind. There is no failure in this area,” Bytyqi said, noting that interest payments amounted to 21.094 billion denars, more than half the funds planned for capital investment.
He warned that public debt, which stood at 10.726 billion euros on June 30, could exceed 11 billion euros by the end of the year. He therefore asked the finance minister to explain how the additional borrowing that had been announced would be recorded in the official public debt accounts.
Bytyqi also called on the government to present a clear plan for paying overdue but unpaid obligations owed by public entities, which stood at 42.66 billion denars in June. He also insisted on greater transparency regarding the obligations included in the budget revision.
In his view, the state should not put companies’ liquidity at risk by delaying its own payments, including timely VAT refunds.
