2015年-世界发展银行全球_FYR_Macedonia_Public_Expenditure_Review___Fiscal_Policy_for_Growth_129页_2mb

Public Expenditure Review: Fiscal Policy for Growth in FYR Macedonia

Core Content

This report, prepared by the World Bank, evaluates the fiscal policy of FYR Macedonia, focusing on public financial management (PFM), the efficiency of public spending, and fiscal sustainability. It provides an in-depth analysis of the country's economic context, public expenditure trends, and key sectors such as transport, health, and pensions.

Main Viewpoints

1. Economic Context and Growth

• FYR Macedonia is a small, open, landlocked economy with a population of 2.1 million.
• GDP per capita in 2014 was USD 5371, placing it in the upper middle-income group.
• Annual real GDP per capita growth (in PPP terms) averaged 3.7% between 2006 and 2014, the second highest in the SEE6 region and far above the EU28 average of 1.4%.
• Despite strong growth, the country has not yet begun EU accession negotiations due to its name dispute with Greece.
• EU accession remains a key driver of the reform agenda.

2. Fiscal Policy and Public Debt

• The government has maintained macroeconomic stability despite adverse shocks, supported by an exchange rate peg to the Euro.
• Public debt increased from 23.0% of GDP in 2008 to 46% in 2014, but remains below the SEE6 average of 52.6%.
• The government has pursued an expansionary fiscal policy, which included tax rate reductions, contributing to lower revenue-to-GDP ratios.
• The government has introduced limited measures to increase revenues in 2014-2015.

3. Public Financial Management (PFM)

• PFM has improved, particularly in debt management and commitment controls.
• The public procurement system is well-structured, with legal frameworks harmonized with the EU.
• Internal audit procedures are strengthened, and the State Audit Office is appropriately funded.
• However, budget execution has been weak, with the government missing fiscal targets for three consecutive years (2012-2014).
• VAT refunds and goods/services arrears were significant in late 2011-2012, but were cleared by February 2013.
• The government moved a large portion of transport spending off-budget in 2013 to improve project implementation, which affected budget transparency.

4. Efficiency of Public Spending

• Public spending efficiency is low, especially in education, infrastructure, and social protection.
• The government spent 4.1% of GDP on education in 2013, but performance indicators were below regional averages.
• Education quality has not improved significantly, as seen in TIMSS scores, and tertiary education efficiency remains low.
• Infrastructure spending favors new construction over maintenance, leading to inefficiencies.
• Social assistance spending is low (1.2% of GDP in 2014) and fragmented, with numerous cash benefit programs.
• Agricultural subsidies and health spending also suffer from efficiency losses.

5. Fiscal Sustainability

• Public debt is projected to increase moderately under the baseline scenario but could rise rapidly if the current Government Program (2014-2018) is fully implemented.
• The program includes large-scale infrastructure investment, which is essential for a small, open economy but requires careful prioritization to avoid unsustainable debt levels.
• The report suggests moderating ambitious infrastructure investment plans with a greater focus on the quality of spending.

Key Information

Public Expenditure Trends

• Public spending averaged 34.5% of GDP between 2006 and 2013, significantly below EU and SEE6 averages.
• General government revenues declined from 33.8% of GDP in 2007 to 27.8% in 2014.
• The share of current expenditures in total public spending is high, around 90%, with more than 25% related to pensions.

Fiscal Challenges

• Weaknesses in PFM have become more evident, including persistent arrears in the health sector and local governments.
• Budget execution has been weak, leading to missed fiscal targets and increased fiscal deficits.
• The 2014 fiscal deficit widened to 4.2% of GDP, compared to the original plan of 3.5%.

Sector-Specific Analysis

• Transport: Road infrastructure investments have been growing since 2014, following years of neglect. The PESR is responsible for most road projects, and its technical capacity has been strengthened.
• Health: Persistent arrears and inefficiencies in health spending are highlighted. The report suggests measures to improve transparency and efficiency.
• Pensions: The pension system faces sustainability challenges due to increasing dependency ratios and declining replacement rates. The report recommends pension reforms to ensure long-term viability.

Policy Recommendations

• Strengthen public financial management (PFM) to improve transparency, accountability, and efficiency.
• Improve the quality of public spending, particularly in education and infrastructure.
• Moderate ambitious infrastructure investment plans and prioritize quality over quantity.
• Address inefficiencies in the health and social assistance sectors.
• Implement fiscal reforms to ensure long-term sustainability.

Conclusion

The report emphasizes the need for sustained efforts to enhance PFM, improve the efficiency of public spending, and ensure fiscal sustainability. These measures are crucial for supporting continued growth and poverty reduction in FYR Macedonia, especially given the current uncertain external environment. The government is advised to focus on strategic and efficient use of resources in key sectors to avoid a rapid increase in public debt.