According to the Ministry of Finance, the measure is aimed at strengthening the export competitiveness of domestic companies, encouraging investment, opening new jobs, and ensuring higher foreign currency inflows into the country. The institution emphasizes that the amendments were drafted in consultation with chambers of commerce and are a continuation of the reforms launched last year, when the first reduction in customs rates took effect on July 1, 2025, bringing them down to 50 percent of the level of the rates applicable in the European Union.

With the legal amendments, customs rates are being brought further into line with those in force in the European Union, in accordance with the provisions of the Government’s 2024-2028 Work Program and commitments to increase the competitiveness of the domestic economy. The reduction of these rates is expected to lower costs for companies, especially in the processing industry, as well as create more favorable conditions for production and exports.

The new amendments provide for the full harmonization of customs rates for these products with the rates applied in the European Union, while also taking into account the rules of the World Trade Organization.

“With the adoption of this law, we are sending a clear message that we are committed to creating a more competitive and more sustainable domestic economy. From July 1, companies will face lower costs for purchasing raw materials and intermediate goods, which will directly affect their productivity, competitiveness, and export potential. Our goal is for domestic companies to have conditions comparable to those in the European Union, to invest more, open new jobs, and create added value in the economy,” said Finance Minister Gordana Dimitrieska-Kocoska.

She stressed that the Government continues to implement policies that guarantee a predictable and favorable business environment, as well as a strong partnership with the business community, with the ultimate aim of accelerating economic growth and ensuring higher living standards for citizens.

This measure will provide direct support to the automotive industry, the metal-processing industry, and metallurgy, while it is also expected to have a positive impact on the growth of exports, foreign exchange inflows, investments, and the number of jobs.

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According to her, capital investments should not be treated simply as expenditures, but as an investment in the country’s future development and the improvement of living conditions. She underlined that these investments have a direct effect on economic growth, while also bringing long-term impacts on development and living standards.

“Capital investments directly affect gross domestic product, and after their implementation, they directly and indirectly affect the economy and the improvement of quality of life,” Dimitrieska-Koçoska stressed, adding that the decision to increase capital spending comes as a result of better project execution and the higher readiness of institutions to carry out planned activities.

“We came to the conclusion that in recent months, some ministers have been focused and committed to their work, and as a result of that we said — all right, let us have greater implementation,” the minister said.

Speaking about the increase in spending through the rebalance, she said the Ministry of Finance should not be guided only by figures, but also by the concrete needs of citizens and institutions.

“The Minister of Finance has the most difficult role, because if we want to look at things only from the aspect of what the budget deficit should be, we will say — yes, the minister firmly sticks to the figure, but on the other hand we have life and reality,” Dimitrieska-Koçoska stressed.

As for revenues, the minister said tax collection is proceeding according to expectations and that current indicators do not signal major deviations from projections.

“The increase in revenues from VAT and other taxes is above the level required to meet the annual projections. The data show that revenues are moving in line with the plan and there is no basis for claims that the budget is facing collection problems. I cannot say there are deviations. The math so far shows that taxes will be collected,” Dimitrieska-Koçoska stressed.

Regarding the budget deficit, she stressed that it should not be assessed through absolute figures, but according to its share in gross domestic product, because only in this way can real comparisons be made between different years and economic circumstances.

“That is precisely why percentages exist — so that comparisons can be made. We cannot compare something that is not comparable,” Dimitrieska-Koçoska stressed, recalling that in 2020 the country faced a budget deficit of 8% of GDP, while adding that fiscal consolidation has become more difficult due to inherited challenges and obligations.

Speaking about public debt, the minister said the Ministry of Finance is pursuing a prudent policy in managing public finances and that the confidence of international financial markets was demonstrated by the successful issuance of the eurobond, with the lowest historical margin.

“Precisely for that reason, when we issued the eurobond, we achieved the lowest margin so far, in historical terms,” the minister said.

In conclusion, Dimitrieska-Koçoska stressed that fiscal policy remains focused on preserving stability, while at the same time ensuring resources for development projects that will have long-term effects on the economy.

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According to them, at the moment when the Government is forced to cover the deficit and debts through new borrowing, it becomes clear to citizens that behind the declarations of development stands an empty treasury and a lifeless economy.

ASH says that this situation requires political responsibility. They add that VLEN cannot remain silent at a time when prices are rising, wages are lagging behind, investments are being delayed, and the burden of debt is being placed on citizens. According to them, propaganda does not fill the budget, does not lower the price of bread, and does not bring the prosperity that has been promised to Albanians.

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Under the new changes, total revenues are projected to rise from 374.9 billion denars to 379.2 billion denars, while expenditures will reach 425.2 billion denars. The budget deficit is widening from 39.2 billion denars to 46.1 billion denars, but will still remain at 4.1 percent of Gross Domestic Product. The vast majority of the additional funds have been directed toward capital expenditures, which are increasing by 5.8 billion denars to reach 46 billion denars.

The two institutions receiving the largest share of the additional funds are the Ministry of Environment and Physical Planning, with 2.3 billion denars more, mainly for water supply systems, sewage networks and environmental infrastructure, as well as the Ministry of Transport, with approximately 1.4 billion denars.

These funds will be used for the construction of Corridors 8 and 10-e, the Skopje-Blace highway, the Corridor 8 railway, water supply and sewage systems, water treatment plants, energy efficiency projects, as well as for the construction and reconstruction of educational facilities, student dormitories and infrastructure in rural areas.

The Ministry of Education will also have an additional 426 million denars at its disposal, while other funds have also been earmarked for healthcare, the SEC, agricultural subsidies, student and pupil standards, sports and social protection.

Coverage of the budget deficit and liabilities for debt repayment, with a total value of 76.4 billion denars, will be carried out through domestic and external borrowing. Of this amount, more than 54 billion denars have been earmarked to meet obligations to foreign creditors, while around 20 billion denars will go toward repaying domestic debt.

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The SAO report emphasizes that the 2024 audit issued an adverse opinion regarding the accurate and fair presentation of the financial position and the results of financial activities, as well as on the compliance of financial transactions with the relevant legislation, guidelines, and established policies.

According to the report, revenue from contributions collected for PIO1 in 2024 increased by 14% compared with 2023, reaching 71,435,601 thousand denars and accounting for 61.74% of total realized revenue.

However, this revenue growth in 2024 remains insufficient to cover pension expenditures, which have also increased every year and in 2024 reached 90,277,241 thousand denars.

Registry data show that at the end of 2024, the system counted 556,294 insured persons and 343,048 pensioners. This translates into a ratio of 1.63 insured persons for every pensioner, marking a slight decline compared with the previous year.

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