Montenegro: Economic recovery faster than expected

As part of the International Monetary Fund (IMF) and World Bank (WB) Annual Meetings, delegations from the Ministry of Finance and Social Welfare (MFSW) and the Central Bank (CBCG) met with Anna Bjerde, World Bank Vice President for Europe and Asia Central, and Koen Davidse, Executive Director of the Dutch constituency at the World Bank.

Representatives of the World Bank estimated that Montenegro’s economic recovery was faster than expected. They commended Montenegro for advancing fiscal consolidation and backed further recovery and development measures, the CBCG said in a press release.

Presenting the current performance effects and future measures for a better standard of living in Montenegro, the Minister of Finance and Social Welfare, Milojko Spajić, noted the importance of the World Bank ‘s technical and professional support for the country that is currently in a good position.

Vice President Bjerde praised the results achieved so far and offered expert assistance in the pension system and public administration reforms.

“Your efforts are already visible this year, it is an extraordinary achievement. We will gladly support you, “Bjerde said.

Director Davidse praised “the excellent tourist season and the faster economic recovery than expected”. The World Bank recently raised its growth outlook for Montenegro in 2021 to almost 11%.

Minister Spajić said that an even better fiscal and economic result of the country is expected. He recalled the 2020 economic downturn of over 15% and a significant recovery already recorded this year.

“Montenegro achieved great success in this tourist season and recorded about 700 million euros in revenue in nine months, which was the forecast for this year. Government debt is declining and the goal is to be around 78% of GDP by the end of the year. In the first 8 months of this year, the budget deficit fell to 1.2%, being one of the lowest in Europe. “It reached almost 11% last year, while the budget for 2021 was projected at a little more than 3%”, specified Spajić.

CBCG Deputy Governor Nikola Fabris briefed on the state of the banking sector through the prism of the latest data for the first nine months of the current year. He noted that all banking operations reports recorded positive trends. Thus, compared to the end of 2020, banks ‘assets at the end of September 2021 increased by 12.5%, loans increased by 10.8%, banks’ capital increased by 6.7% and deposits by almost 18.3%.

Minister Spajic presented the next set of measures from the “Europe Now” program to increase the standard of living of citizens. He stressed that, among other things, the minimum wage will be increased from 250 to 450 euros. The existing high workload contributions will halve and ease the economy which should lead to an increase in the salaries of Montenegrin employees by about 17.5%. In that context, he presented the idea of ​​organizing a regional meeting to present the benefits of the “Europa Now” measures to improve the standard. Vice President Bjerde noted that the World Bank could contribute its expertise to such an event.

Representatives of the World Bank expressed their full readiness to continue supporting Montenegro.

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