In May 2019, the government of North Macedonia introduced new primary legislation to improve transparency, assessment, and management of public finance risks. Secondary legislation, a “Rulebook” to regulate the implementation, followed in August 2020. The new Public Debt Management Law requires credit-risk analysis before the issuance of sovereign guarantees, increasing the resiliency of the government budget.

On the road to the European Union (EU) accession, the government of North Macedonia made infrastructure a priority for achieving economic growth. Committing more than 1 billion euros to over 20 transport infrastructure projects alone (2014-19),the government backed the projects' funding by extending sovereign guarantees to state-owned enterprises (SOEs), subnational entities, and public companies.

"The government-guarantee portfolio of North Macedonia is at 8.8% of GDP, still at relatively comfortable levels" said Dejan Nikolovski, Head of the International Finance and Public Debt Management Department (IFPDMD) in Ministry of Finance of North Macedonia. "But with many infrastructure projects on the horizon, we thought it was essential to assess the fiscal risks that might arise from issuing sovereign guarantees."[…]