Second Budget Revision This Year: Capital Investment Cut by 5.7 Billion Denars, Deficit Stays at 4.1 Percent of GDP

"The budget is not dogma. The budget is a tool for managing reality," said VMRO-DPMNE MP Bojan Stojanoski, defending the second revision of the 2026 Budget. Reality, judging by the numbers, looks like this: before the year is out, the state is once again re-cutting the books, and among the items being cut, capital investment has once again ended up on the list.

Under the proposal, total revenue is projected at 374.2 billion denars - around 5.3 billion less than the previous projection - and spending is reduced by the same amount, to 420.5 billion. The deficit stays at 46.3 billion denars, or 4.1 percent of GDP. The government stresses that it is not rising compared to the July revision. It says less loudly that it is higher than the deficit originally planned for 2026.

The biggest hole on the revenue side is excise duties, which fall from 34.1 to 30.4 billion denars because of the cut in fuel excise. That was a measure to soften the price shock from the oil crisis, and now the budget is paying for it.

Where the money goes

Social transfers rise by around 3.65 billion denars and reach 212 billion. Of the extra money, 1.44 billion goes to welfare benefits, 1.34 billion to pensions and around 887 million to health care. "A pension is not charity. It is a right," Stojanoski declared. Few would argue with that.

But the money has to come from somewhere. Capital spending is being cut by around 5.7 billion denars compared to the previous revision and is now planned at 40.12 billion. The explanation is that some projects cannot be completed by the end of the year, partly because of failed tenders, while some of the corrections are savings on gas payments. By September, 25.3 billion denars had been spent on capital investment - 23.9 percent more than last year, but still far from what was planned.

Finance Minister Gordana Dimitrieska-Kochoska defends the corrections as "a responsible approach in conditions of uncertainty" and says the development priorities remain: Corridors 8 and 10d, the Skopje-Blace road, the rail sections towards Bulgaria and Serbia, water supply and sewage systems. The growth projection for 2026 is kept at 3.5 percent.

More than 120 amendments have been filed to the revision, and the debate in the parliamentary committee lasts no more than 10 days. The question that will remain after the vote is as old as budgets themselves: if capital investment is being cut because the tenders failed, is the problem the money - or a state that doesn't know how to spend it on what it promised?