Blagica Petreski on FinSight: Public Debt and the Economic Outlook in 2026

North Macedonia has once again borrowed on international markets through the issuance of its tenth Eurobond, worth one billion euros, aimed at servicing maturing obligations and stabilizing public finances. However, in the coming months, additional borrowing is expected—this time through loans—in order to secure funds for the regular settlement of obligations.

What does this mean for the economy? Can economic growth or stagnation be expected this year, how will inflation evolve, and what can the business sector anticipate?

In the new episode of FinSight, we speak with Blagica Petreski, Executive Director of Finance Think – Institute for Economic Research and Policy. We analyze where budget funds are being allocated, the burden of public debt, how realistic the projected growth of 3.5 percent is, and whether rising wages could further fuel inflation.

The discussion also focuses on labor productivity, the grey economy, the effects of the “My VAT” project, and the key reforms the economy needs to achieve sustainable growth and a higher standard of living.

NEW Policy Study 57!

📘 New Policy Study
We analyze how public finances translate (or fail to translate) into better education and health outcomes across six Western Balkan countries, using panel data for the period 2006–2020 and CMP methodology.

🔍 Key findings:
• 🧾 It’s not just how much we spend — it’s how we spend it: stronger budget execution is the key channel through which PFM affects outcomes
• 🎓 In education, PFM does not operate directly, but through improved technical efficiency → higher preschool enrolment and better student–teacher ratios
• 🏥 In health, better budget execution is associated with more doctors, higher DPT immunization coverage, and longer life expectancy
• 📉 Weak transparency and insufficient medium-term planning constrain the effectiveness of public spending
• ⚙️ PFM is the “silent driver” of social outcomes — without it, even higher spending fails to deliver results

📌 Policy message:
Improving health and education outcomes does not start in the classroom or the hospital, but in the budget process: medium-term planning, transparency, and disciplined execution.

🔗 shorturl.at/Wxdkc
#PublicFinanceManagement #Education #Health #WesternBalkans #EvidenceBasedPolicy #PFM

Regional capacity-building for transparency and EU Alignment in state aid practices in the Western Balkans

Overall Objective: To strengthen regional cooperation, transparency, and EU alignment of state aid practices in the Western Balkans through targeted capacity-building, stakeholder engagement, and evidence-informed dialogue.

Specific Objectives:

  1. Enhance institutional knowledge and regional cooperation by delivering a series of workshops and webinars that bring together state aid authorities, competition commissions, and expert institutions from all six Western Balkan economies.
  2. Build a shared understanding and consensus on key state aid reform prioritiesthrough joint discussions, selection of critical thematic areas, and collaborative development of methodology for short regional position briefs and a roadmap for improved transparency and EU acquis alignment.
  3. Increase public and institutional awareness of transparent state aid governancethrough visibility activities, tailored communication materials, and promotion of regional cooperation outcomes across media and stakeholder networks.
  4. Strengthen the role of the WEBECON Network in regional monitoring and dialogue on state aidby actively involving WEBECON members in data validation, facilitation of stakeholder engagement, and joint reflection on state aid practices, thereby enhancing

Donor: Western Balkans Fund