Rebalance: capital spending cut by 5.7 billion denars, deficit stays at 4.1 percent of GDP

The second 2026 budget rebalance reduces both revenues and expenditures by about 5.3 billion denars, or about 86 million euros. Revenues fall from about 379.5 to 374.2 billion denars, and expenditures from about 425.8 to 420.5 billion, according to Trn's October 9 report. The deficit stays unchanged: 46.3 billion denars, or about 4.1 percent of GDP, roughly 753 million euros.

Where is the money cut? The largest reduction is in capital expenditure, about 5.7 billion denars (over 92 million euros). The government says projects already under way will continue, and mainly those not yet started or facing technical or administrative obstacles will be postponed. The Ministry of Energy loses about 1.9 billion denars, and the Ministry of Environment about 1.5 billion. There are also reductions at the Ministry of Finance, the Administration for Execution of Sanctions and some government programs.

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Where does the additional money go? According to the same report, health and social protection get more money. I found no specific amounts for health, nor any figure for pensions, in the source I checked, so I cannot say exactly how much each sector rises.

Why are revenues falling? Total tax revenue falls from 213.3 to 209.8 billion denars, and excise duties most, from 34.1 to 30.4 billion. Finance Minister Gordana Dimitrieska-Kochoska linked part of this to measures easing pressure on fuel prices, including lower excise duties and the cut in VAT on diesel from 18 to 10 percent. The growth projection for 2026 stays at 3.5 percent, and the inflation forecast is lowered to 3.8 percent.

There is also a contrast with the previous correction. On July 30 the minister presented the earlier rebalance as a rare one that raises capital expenditure, by almost six billion denars, and said the whole budget deficit in essence finances capital spending. Now capital expenditure is cut by 5.7 billion, roughly as much as it was raised in July. The two figures come from different reports and different items, so it is not a direct comparison, but they show that capital room is narrowing.

The opposition SDSM, through leader Venko Filipče, assessed the rebalance as the result of poor economic management. The government defends the measures as protecting citizens from the energy crisis. Both are political assessments; the figures in the rebalance are what can be checked.

What is not known? It is not known which specific projects will be postponed, or how much of the cut 5.7 billion will be felt on the ground. It is also unknown how much additional money health and social protection get, or whether anything changes for pensions. It is unclear how the deficit will be financed.

What does it mean? The state protects current spending and the fuel measures, and pays by postponing new capital projects. The real effect will be seen in which construction and procurement projects are delayed.

MKNews Hub · Macedonia · October 23, 2026