Second Budget Revision of the Year: Revenue and Spending Each Cut by About 86 Million Euros, and the Deficit Has Already Blown Past the Plan

The government has adopted a proposal for a second revision of the 2026 Budget, just a few months after the July one. Planned revenue is being cut from 379.5 to 374.2 billion denars - a reduction of 5.31 billion denars, or about 86.3 million euros. Spending drops from 425.8 to 420.5 billion denars, by 5.27 billion, or about 85.8 million euros.

The explanation is the reduced excise duty and VAT on fuel - measures which, according to the government, soften price shocks for citizens and businesses. The announcement, however, doesn't say which spending items will absorb the cuts. The proposal now goes to Parliament.

The deficit is already spent

The government stresses that the deficit remains unchanged at 4.1 percent of GDP, or about 46.3 billion denars. But that is already an inflated figure: the original budget projected a 39.2-billion-denar deficit, and the July revision raised it by another 7 billion.

Reality is even less comfortable. According to the Finance Ministry's fiscal counter, as of October 6 revenue stands at 267.5 billion denars and spending at 317.7 billion. That's a deficit of 50.2 billion denars, or about 817 million euros - almost 4 billion denars above the annual plan the government says it is keeping. To get back to the plan, the state will have to collect around four billion denars more than it spends in the last months of the year.

"Badly planned revenue"

Economists aren't impressed. Former finance minister Nikola Popovski warns that a second revision is not a good look for the economy, that funding for spending in the last quarter will be limited, and that infrastructure investment financed by foreign loans will push public debt up further. Economic analyst Siniša Pekevski is even more direct: "Planned revenue was badly planned, and that's why there's a second revision, while there's no major crisis situation."

Two budget revisions in one year, and no major crisis, as Pekevski points out. Is the problem really the price of fuel - or the numbers written down at the start of every year in the hope that they'll somehow work out?