Macedonian capital, infrastructure investments, have risen to a record level of 21,2 billion denars, or 340 million EUR. This puts them at twice the levels they were in 2005 - 10,1 billion denars. The rise has been gradual in the past years - in 2011, capital investments allotment in the budget amounted to 17,7 billion, in 2012 it was 18,75 billion and in 2013 the amount reached 19,3 billion denars.
The planned funding for 2015 includes work on three major capital investments - the Demir Kapija - Smokvica north - south highway, the Miladinovci - Stip - east - west highway and the Kicevo - Ohrid highway connecting two major cities in the Macedonian south-west. The total length of the new highways is 132 kilometers, and two of them are being built with Chinese provided credit lines.
University professor Dimitar Eftimov points out that in the past years Macedonian budget has a major development component that shows through the capital and infrastructure expenditures. This, according to professor Eftimov, helps the economy by improving the business environment in the country, but also affects the quality of life by providing higher wages and social expenditures.
Eftimov points out that the main part of this development mix is the projected 4 percent gross domestic product growth, that must also be followed by an appropriate increase in demand that comes from rising wages, more welfare spending and the rise in retirement benefits. Professor Eftimov says that this high projection of infrastructure spending will do much to support the economic growth.
- The road infrastructure, the water management investments, the natural gas infrastructure, they will all help improve the potential for the businesses in the country, Eftimov said.
He also sees potential for more foreign investment following the infrastructure projects.
- Good infrastructure is necessary to attract foreign direct investments, that are the other component of economic growth. Since we still have an unemployment rate of 28 percent, while lowest in recent years, new investments will help bring living standards up, Eftimov.
If we put together the planned 340 million EUR in capital investment, professor Eftimov says, with the expected 600-700 million EUR in foreign investments, that will be a potent mix to fuel growth. If other predictions, such as the stable inflation level of 2 percent and the budget deficit of 3,5 percent of BDP hold, professor Eftimov says that Macedonia can expect sustained growth and improvement in the quality of life.
