Macedonia's Government adopted the draft-budget for 2013 at a session on Friday evening.

Total revenues in the draft-budget are projected at 147 billion and 957 million denars with total expenditures standing at 165 billion and 652 million denars. Budget's deficit is projected at 3.5% of the Gross Domestic Product (GDP).

"The Government believes that amid expectations of sluggish recovery of the European and Macedonian economy, this level of budget deficit is reasonable and necessary in terms of maintaining an adequate level of fiscal stimulation for the Macedonian economy, taking into consideration that the 2013 budget also includes an increase in investments, pensions, social allowances and agricultural subsidies," Vice PM and Finance Minister Zoran Stavreski told Saturday's press conference.

The 2013 budget is projected on a forecast of 2% GDP growth, 3.5% inflation and gross investments of 6%. Foreign-exchange reserves maintain a high level, whereas foreign exchange rates remain stable with monetary and fiscal policy aiming at maintaining a stable level of foreign exchange rates and price stability, which is the ultimate goal of the monetary policy.

"The draft-budget for 2013 is planned in a realistic manner and represents an adequate response to the European crisis and the developments within the eurozone," Mr. Stavreski noted.

According to macroeconomic assumptions, he added, Macedonia's economy in the course of 2013 will achieve a moderate activity growth of the Gross Domestic Product of nearly 2%, which is higher than the average growth rate in the eurozone, but less than the potential growth of the Macedonian economy.

Gross investments will attain a real growth rate of nearly 6%, while personal consumption is expected to make a moderate growth of 1.5%. Import and export in 2013 are expected to stand at 5.3% and 5.7% respectively.

Minister Stavreski said that the sector of construction was expected to achieve a moderate growth of 3.5%, whereas the real sector was projected to experience gradual recovery.

The trend of high level of capital expenditures is expected to be continued, which are higher by 10.4% compared to this year.

In the frameworks of capital expenditures, the Finance Minister stressed, funds have been singled out for several major infrastructural projects - completion of the Corridor 10 highway, Demir Kapija-Smokvica highway as well as investments in the railroad infrastructure.

Investments amounting to 2 billion and 51 million denars are planned for energy projects and communal infrastructure.

Funds in amount of 413 million denars are planned for technological and industrial development zones, which are one of Government's priorities, according to Mr. Stavreski.

Investments of nearly 2 billion denars are planned for healthcare with about one billion denars being projected for projects in education.

The budget deficit will be financed by foreign and domestic funds, Mr. Stavreski stated.

"This moderate level of budget deficit on the short-term will help the economy to overcome the European crisis and its consequences. From a long-term point of view, Macedonia by consolidating the budget deficit will keep on maintaining a low level of public debt, which is one of the characteristics of Macedonia," Minister Stavreski concluded.