Early Budget Rebalancing Reflects Forecast Discrepancies, Says Former Finance Minister
North Macedonia is undertaking a significant budget rebalancing this year, a move former Finance Minister Xhevdet Hajredini believes is not intended as a rescue operation. Speaking to “Lokalno,” Hajredini explained that a successful budget adjustment wouldn’t be necessary if a nation faced genuine financial difficulties. The rebalancing is occurring earlier than typically planned, according to Hajredini.
He attributed this to flawed initial forecasts. “All countries manage their budgets, and our country’s budget is undergoing this adjustment proactively,” he stated. “This stems from inaccurate projections based on overly optimistic growth rates, claims of European leadership, and forecasts regarding borrowing.”
Hajredini emphasized that the current situation diverges significantly from the previously promoted growth rate and inflation predictions made by the Prime Minister and the current Minister of Finance.
“The reality is that neither the inflation rate nor the growth rate are aligning with the projections that were initially presented,” he asserted. The budget rebalancing reflects a shift from previously optimistic economic forecasts and highlights the challenges facing the country’s financial outlook.
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“It’s concerning to hear about these forecast inaccuracies impacting such a major budget adjustment.”
What factors are contributing to the inaccurate forecasts that prompted the budget rebalancing?