October 17, 2003
This statement provides information on developments since the issuance of the staff report for the first review under the Stand-By Arrangement with FYR Macedonia. This statement does not change the thrust of the staff appraisal.
The prior actions for the review have all been met
- The supplementary 2003 budget was passed on September 17, 2003.
- A report on the reconciliation of the fiscal and monetary accounts was transmitted to the staff on September 18, 2003.
- In the health sector, the staff has been informed that 910 health sector employees have been notified that they have been declared redundant, and will be laid off. (The World Bank staff have indicated that these redundancies—if accompanied by a redeployment of staff—will not result in deterioration in the delivery of health care.)
Budgetary spending continues to fall short of targeted levels
Preliminary third quarter data suggests that government spending, particularly investment spending, continues to be well below budgeted levels. The expenditure shortfall—if sustained during the remaining months of the year—could reduce the central government deficit to as much as one percentage point of GDP below the program figure. As indicated in the staff appraisal, this would alleviate concerns about a sharp fiscal impulse in the second half of 2003.