FYR Macedonia’s new Finance Minister, Dragan Tevdovski, has stated his intention to undertake actions to resolve the growing problem of public debt by lowering the costs of borrowing despite the need to continue borrowing. In a statement during a press conference, Tevdovski has said that most of the borrowing will continue to take place predominantly in the domestic market at lower interest rates, but has not excluded the possibility of participating in the international capital market under favorable conditions.

Public debt has been one of the most discussed issues in FYR Macedonia in recent years as it has been continuously on the rise in the last 10 years, reaching a level of 47.8% of the country’s GDP in 2016. During certain quarters of 2016 – amid political uncertainty - it exceeded the threshold of 50% of GDP, prompting IMF’s calls to keep it in check. Questions about the debt calculation methodology have abounded with different sources often out of sync. Certain estimates place the current public debt at alarming 54% of the national GDP. In its recently published data, the Ministry of Finance (based on its projection) has estimated a 46% of GDP public debt for Q1 of 2017. Historically since the independence, public debt was at its highest in 2000 and its lowest in 2008.

The Minister has also noted that the Ministry will increase the issuing of domestic government securities while reducing the frequency of auctions to only twice a month, aiming to encourage secondary market trading. An amount of EUR 203 million is available from the previously issued bond which is expected to cover the older borrowings from foreign sources.