[{"bbox": [83, 105, 1149, 159], "category": "Text", "text": "The later produces regular reporting in terms of eligibility for social transfers around four categories of vulnerability (which are co-monitored and validated by Municipalities), while the later monitors the transfers per se."}, {"bbox": [83, 184, 1149, 266], "category": "Text", "text": "In terms of green economy and in particular renewable energy monitoring is done by the Ministry of Industry and Energy (Directorate of Energy) in terms of installed capacity, tenders and regulatory framework while energy prices are monitored and reported by ARME (Multisectorial Economic Regulatory Agency)."}, {"bbox": [83, 290, 1149, 369], "category": "Text", "text": "**In conclusion, the policies are sufficiently relevant and credible for budget support contract objectives to be largely achieved. Therefore, the policy can be supported by the Commission with the proposed budget support contract.**"}, {"bbox": [124, 380, 433, 410], "category": "Section-header", "text": "### 2.3.3 Macroeconomic Policy"}, {"bbox": [83, 471, 1149, 605], "category": "Text", "text": "The country economy is in a steep recession as a result of the COVID-19 impact on international tourism and transport, reduction of related economic activities and domestic containment measures. The authorities adopted several social and business-oriented mitigation measures while pursuing a stability-oriented macroeconomic policy. The eligibility criterion for sustainable international debt support are still met; but the economic outlook remains highly uncertain and dependent on the duration of the pandemic and the global economic recovery."}, {"bbox": [83, 616, 1149, 747], "category": "Text", "text": "The impact of the pandemic was significant in 2020, due to the global economic downturn, travel restrictions and other COVID-19 containment measures. Tourism receipts (previously responsible for 25% of GDP) dropped 75% and significantly affected other sectors. Preliminary data indicate that at end-September 2020, exports and imports of goods declined by 50% and 13% respectively, while services (net) contracted by 72%. Formal unemployment reached 20%."}, {"bbox": [83, 761, 1149, 922], "category": "Text", "text": "In response to the COVID-19 crises, the Government increased substantially expenditure from 31.2% of GDP (in 2019) to 34.7%, with a projected expenditure of 37.6% in 2021. The funds helped businesses, households, and vulnerable groups address the impact of the pandemic, through increased health services, social protection measures (e.g. cash transfer programs), moratorium on tax payments and loans, lay-off regimes, among others. But, it also increased public debt as government revenues declined by 23% in 2020. Additional budget support grants, including EUR 17 000 000 from the EU, and concessional credits partially compensated the fiscal gap in 2020."}, {"bbox": [83, 932, 1149, 1067], "category": "Text", "text": "With annual contributions between 10% and 13% of GDP, remittances from the diaspora provided an important share of foreign currency to the national economy and a direct contribution to the social welfare of many families. The latest figures from the Central Bank indicate that the level of remittances slightly increased, despite the pandemic in the countries where the diaspora resides. While in 2019 remittances reached EUR 180 000 000 (10.2% of GDP), the latest figures for 2020 indicate an upward trend to EUR 188 000 000 (12.7 GDP)."}, {"bbox": [83, 1077, 1149, 1184], "category": "Text", "text": "The country macroeconomic situation remains fragile after an estimated GDP contraction of -14% and a cumulative public debt of 140.9% in 2020 (IMF, 2021). Foreign exchange reserves are currently close to 7 months of imports. The Public debt is expected to remain high in the next years, being projected at 138.7% and 132%, respectively, by 2021 and 2022 (IMF, 2021)."}, {"bbox": [83, 1196, 1149, 1331], "category": "Text", "text": "In its April 2021 country report, the IMF indicated the seriousness of the current macroeconomic challenges and fiscal framework risks, with an estimated fiscal deficit of EUR 136 000 000 (8.9% GDP). The 2021 national budget amounts to EUR 706 000 000, funded primarily by estimated tax revenues of EUR 366 000 000 or 20.9% GDP, and external credits (EUR 157 000 000). As the crisis prolongs, a revision of the expected tax revenue level and alternative financing may be required."}, {"bbox": [83, 1342, 1149, 1528], "category": "Text", "text": "The Government secured additional fiscal space through the moratorium on debt service for an amount of EUR 41 200 000, reducing expenses by EUR 24 600 000, and increased use of single treasury account (+ EUR 11 700 000). Under the G20 debt relief initiative (DSSI) a debt service suspension of USD 15 500 000 was obtained in 2020. An additional USD 24 900 000 may be deferred with an extension until end of June 2021. The overall debt service represents about 1.1% of GDP and is primarily domestic, not covered by international debt suspension initiatives. This relatively low debt service will however increase substantially once the moratoria granted by the bilateral debt creditors ends in 2022."}, {"bbox": [83, 1540, 1149, 1620], "category": "Text", "text": "Despite the adverse impact of the pandemic, important gains were made through the IMF Policy Coordination Instrument (PCI) in 2020. All end-September 2020 quantitative and non-quantitative continuous targets were observed; The two reform targets (RTs) which were missed because of constraints generated by the pandemic are"}, {"bbox": [1051, 1663, 1158, 1687], "category": "Page-footer", "text": "Page 9 of 28"}]