The finance minister tells citizens to save, while the state plans to borrow from them through a new citizens' bond

Finance Minister Gordana Dimitrieska-Kochoska has some advice for citizens: be aware of the uncertainty in the global economy, and save. At the same time, the state has a plan for their savings. By the end of 2026 it will issue a new citizens' bond - people lend money to the state and earn interest. How much money it wants, at what rate and for what term, the minister has not said yet.

Until the end of the year the state will fund itself on the domestic market, through government securities and by refinancing debts as they come due. In 2027 comes new borrowing abroad, mainly to repay the 2023 eurobond - 500 million euros issued at 6.96 percent interest. One option is to split the new debt into two issues.

Only 150 million instead of 250 - because of high interest rates

A few days ago Macedonia borrowed 150 million euros on the international market, instead of the planned 250 million. The reason, according to the minister, is the price: French bonds are trading above 5.4 percent, British ones above 6 percent. "The situation is outside of what it used to be," she said. In January the state already borrowed one billion euros via a eurobond, in two tranches of 500 million each, at 3.875 and 4.75 percent.

At the same time, the government adopted a second revised budget for 2026 - the second in a single year. Revenue and spending are each cut by around 5.3 billion denars, but the deficit stays at 46.3 billion denars, or 4.1 percent of GDP. The biggest share of the cuts falls on capital investment - 5.7 billion denars, mostly at the energy and environment ministries. As an example, the minister pointed to a failed tender at the Directorate for Execution of Sanctions, for which more than 200 million denars had been set aside.

Interest is growing faster than the debt

Here is the number anyone buying the bond should know. Public debt at the end of the second quarter stood at 58.8 percent of GDP, around 10.7 billion euros. According to the Public Debt Management Strategy, it will be 61.5 percent at the end of 2026 and 61.8 percent in 2027 - above the 60 percent threshold. Interest in 2027 is budgeted at 24.4 billion denars, roughly 397 million euros. That same year, around 43.6 billion denars is planned for capital investment. In other words, interest alone will come to more than half of what the state plans to put into capital investment.

According to one economic analyst's calculation, interest payments rose by more than 110 percent between 2022 and 2026, while the debt itself grew by around 40 percent. The state is borrowing at ever higher prices, and investments keep getting postponed. Saving, then, is good advice. The only question is whether it also applies to the one giving it.