Minoski: Public debt level warrants alarm; fiscal consolidation is needed

Kiril Minoski, a former finance minister, said on Telma television’s “Top Tema” program that public debt, which is close to the 60 percent threshold, should be viewed as a strong warning sign for a country with North Macedonia’s level of economic development. According to him, the authorities should take into account the advice of international financial institutions and implement fiscal consolidation in order to reduce the deficit and public debt.

Minoski stressed that borrowing will remain necessary in the coming years, but that the way these funds are used is particularly important. He raised questions about financing, the setting of priorities and the focus on structural reforms that could increase economic growth rates and make it easier to repay the debt.

LSDM lawmaker Fatmir Bytyqi said that public debt analysis should be based on two key elements: its ratio in relative terms and its overall value in absolute figures.

Bytyqi emphasized that borrowing and increasing debt make sense only if they create new value for the economy. He said that the state is currently not reducing public debt by even one denar, as it is only refinancing it by replacing old debt with new borrowing.

According to the LSDM lawmaker, the country’s priorities must also be clearly defined. In this context, it remains to be determined whether the focus will be on preserving living standards or protecting citizens’ health, as was the case during the COVID-19 crisis, the energy crisis and the economic crisis, or whether another alternative will be pursued.

Bytyqi added that the economy is currently stagnating or declining, while the country is losing its competitiveness. He questioned whether, in five years, the economy will have the necessary strength to achieve concrete results or will merely try to survive.