Have we learned the lessons from past crises? It seems not, which is why the price we will have to pay, if the situation escalates, will be higher.
Voice of others: Editorial by Mirce Jovanovski published in Nezavisen.mk
Financial, health, security, energy… crises have been changing like a film strip over the past twenty or so years, leading to numerous shocks and great uncertainty. Macedonia was not spared from them, and it dealt with the challenges as best it could, which often meant rather clumsily and ineptly.
Instead of using the crises as an opportunity, as some politicians said, in our case they resulted in significantly higher public debt that did not contribute to stimulating the economy, which is roughly in the same place it was, nor did productivity and competitiveness improve, nor did the structure of the economy either, and the budget, although it rises to new record levels every year, proved to be anemic and without much room for maneuver to contribute to improving the situation in the economy.
In this situation, what can we expect from the current crisis, triggered by the US and Israeli intervention in Iran and whose contours are already visible? Can Macedonia and its economy withstand another major crisis, such as the one that seems to be looming?
The information that is arriving these days shows that the prices of oil and gas have increased significantly. According to all analyses, the price of oil could rise to 150 dollars per barrel, two and a half times more than the prices in the past period. In the case of gas, at least in Europe, the situation is even more dramatic, the increase has already more than doubled.
Although no one predicts an energy shortage, the main danger and consequence of such trends will be inflation.
The increase in energy prices will be passed on to other products and services, which will inevitably drive up costs.
Increased inflation, in turn, will cause interest rates, i.e. the cost of capital, to rise, and all of this, combined with uncertainties in world trade, more expensive transportation, and increased turbulence on stock markets and financial markets, could result in a recession.
Even for the United States, the world’s leading economy, things are not looking good. The first 100 hours of Operation Epic Fury cost American forces at least $5.82 billion, or about 0.69 percent of the total U.S. defense budget for 2026. The United States is estimated to have spent $779 million in the first 24 hours of the operation, but as the fighting continued, the total operational costs of the American offensive reached approximately $3.3 billion.
Nobel laureate Paul Krugman said in a video blog “Where Is My Golden Age” on Friday that 17 days after President Donald Trump’s State of the Union address in which he talked about a “golden age,” the fantastic job growth never seen before, and low gas prices, “none of it is true.” “
“It doesn’t look like it this morning,” Krugman said, pointing out that the number that caught his eye was the jobs report that the United States lost 92 000 jobs in February. Krugman said he doesn’t believe that, just as he doesn’t believe the previous month’s figure of 126 000 jobs created in January.
Another thing is oil and gas prices. At the time of the video’s release, the price of Brent crude was $90 a barrel, which is a significant increase. But what Krugman emphasized is that the price increase is happening faster than he expected.
“17 days ago when Trump was bragging about low gas prices, the national average was $2.98 per gallon, while on Thursday, March 5, it went up to $3.32 per gallon, which is a pretty big increase,” he says. But worst of all, that won’t be the end of it, considering that many of the tankers in the Strait of Hormuz, through which one-fifth of the world’s oil passes, are stuck on the wrong side.
Gas prices are nowhere near the peak they had during the supply chain crisis as a result of the Covid pandemic, nor during the worst oil crises in decades, but they are going up.
Back in Macedonia, what can be seen today on the website of the Ministry of Finance is that the fiscal counter shows that the realization of budget revenues as of March 5 this year was 14.75 percent, while the total expenditures were 19.58 percent. In the case of capital expenditures, the realization is 20.6 percent (for this success that the Minister of Finance, Gordana Dimitrieska-Kochoska, boasted, an interesting explanation is given by former Deputy Prime Minister and current MP Fatmir Bytyqi, but more on that below).
The budget is obviously struggling with the inflow of funds. Collection was particularly poor in January, now it has improved somewhat, but it is below the ideal 16.6 percent that “mathematically” should fall to the state’s account, if the inflows are divided equally by month (which is never achieved in practice). On the other hand, there is a significant overrun in expenditures, and in capital expenditures it is even greater.
Here we come to the explanation that Bytyqi explained in “Just an Interview” on Kanal 5 television. According to him, the “secret” of such “success” is in last year’s budget, which included 500 million euros less in revenue, or eight percent of the total projected. That was the reason for the payment to be transferred to this year, which “inflated” capital expenditures, but this practice will contribute to the shortage of money in the Budget this year being felt even earlier, already in November, Bytyqi believes.
“The problem is that all the figures now show that we are in a very difficult situation and the crisis is not to blame for that. The main problem is that Macedonia is once again unprepared for the crisis,” says Bytyqi.
If such forecasts come true, in conditions of a growing global crisis, then the space for intervention by the Government will be limited.
Contrary to such criticism, however, the government is much more relaxed. Finance Minister Gordana Dimitrieska-Kochoska stated at a government panel on Friday that “Macedonian companies are operating in conditions of global uncertainty, which is creating downward results in all countries in Europe when it comes to GDP, and we even have economic partners that are going into the red.”
“In contrast, our economy has shown that it is stable, that it is quite resilient and resistant to all these challenges that are happening on a global level,” said the Minister of Finance.
This is somewhat reminiscent of a statement from the time of the financial crisis that we would actually have made a profit. How it turned out later is very well known.
Now, the first test of the resilience of the domestic economy, but also of the standard of citizens, will be seen as early as tomorrow, when the Energy Regulatory Commission will announce the new prices of derivatives, but also in the coming period when the effects of the crisis will intensify globally, and which will slowly but inevitably be transmitted to the domestic economy.
What will happen to the prices of oil derivatives and gas in our country?
A simulation made using artificial intelligence tools offers the following three scenarios (based on analyses by institutions such as the IMF, the International Energy Agency, and NATO):
According to the most likely scenario, for a limited conflict, fuel prices in Macedonia would increase by 5 to 15 percent, inflation would increase moderately, by 0.5 to 1.5 percent, and the pressure on economic growth would be relatively small, and there would also be possible short-term increases in electricity prices.
In the event of a regional escalation of the conflict (the second scenario), where what happens to the Strait of Hormuz will be crucial, fuel prices would increase by 30-60 percent, food and transport would also increase in price, economic growth could slow significantly, and the government might have to subsidize electricity and fuel.
The worst-case scenario is in the event of a major global crisis, when oil could reach over $150-200 per barrel, Europe would fall into recession, which would directly affect the Macedonian economy, due to a drop in demand from the EU and a drop in exports from Macedonia, and layoffs in industry would also be possible. This would be similar to the economic shock of 2022 after the war in Ukraine, but potentially larger. Other countries in the region would also suffer major consequences.
Another interesting fact is mentioned – in global energy crises, small economies like Macedonia often feel a stronger inflationary blow than large economies, because they have fewer protection mechanisms.
The key question is how much fiscal space is there for new borrowing, should such a need arise, in a situation when public debt is close to the psychological limit of 60 percent of GDP, when the budget deficit is projected at 3.5 percent of GDP, and when billions of euros of debt are due for repayment in the next few years.
According to some estimates, in the event of a serious crisis, Macedonia could mobilize from 0.5 to one billion euros of additional debt, without entering a critical zone, but this would come at a cost – through higher interest rates and greater pressure on the budget in the future and of course the prolongation of the fiscal consolidation process, as outlined in the fiscal strategy. The current budget includes 200 million euros in reserves.
For comparison, during the Covid crisis, the then government implemented several economic packages to help companies and the population in the amount of about one billion euros through borrowing on the international financial market, then from the IMF, the World Bank, and borrowing on the domestic market.
Due to the structure of the budget, as it is (the largest part of the expenditures are for salaries in the public sector, then for transfers to PIOM for the payment of pensions, social transfers, payment of interest on borrowing, etc.), i.e. expenses that are difficult to reduce, the government generally has two options available to it – to borrow additionally or to cut capital investments (with all the impact on economic growth) or a combination of both.
Additionally, if the interest rates on the new borrowing increase, which is very likely, the expenses will increase even more. The interest rates that the state currently pays are around 250-300 million euros per year, and if they continue to grow, they could reach 350-400 million euros per year, which will mean fewer funds for other purposes.
They say repetition is the mother of knowledge. But, in our case, it seems we have not learned the lessons from past crisis situations. Therefore, the price we will have to pay, if the situation escalates, will be higher.
Mirce Jovanovski is Business Journalist and heads the economic section of Nezavisen.mk The article was published there on March 8th, 2026.
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