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09/07/2013

The Governor Milojica Dakić chaired the forty-sixth meeting of the Council of the Central Bank of Montenegro that was held.

The Council adopted the Governor’s Report on Business Operations and Implementation of the Central Bank of Montenegro Policy for April and May 2013 indicating that activities of the Central Bank were carried out in accordance with the planned obligations, set by the Work Plan and Policy of the Central Bank for 2013. It was estimated that there is a relatively stable financial system and a moderate level of systemic risks.

The Council adopted the Macroeconomic Report of the Central Bank of Montenegro for Q1 2013. It was noted that during the observed period, there was a high economic growth, but that it is too early to speak about this type of annual growth projection, given the low base from Q1 2012. Negative trends in industrial production were stopped, while the volume of activities in construction and forestry increased. The report highlights the fact that there is still a high insolvency risk in the real economy, but what is encouraging is an increase in exports and a decline of imports. At the same time, there is an obvious decline of gross and net salaries, compared to the same period of the previous year. The key risks include a high public debt and its potential further growth. The banking system is stable and liquid but the share of non-performing loans remains high.

The Council also adopted the Inflation Report for Q1 2013. The Report noted that CPI inflation in Montenegro in March 2013, relative to December 2012, amounted to 0.5%.  During this period, the prices from the category food and non-alcoholic beverages as well as transport recorded the highest growth. The annual inflation at end-Q1 amounted to 3.3%, and is significantly lower compared to the annual inflation in December 2012 when it amounted to 5.1%. According to the model estimate, it is expected that e inflation will range between 3.9% and 4.9% at end-2013, while according to the expert estimate, it will range from 3% to 5%. Compared to the previous projection as of December 2012, the inflation projection for this year increased because of VAT increase which will affect the increase of prices, as well as an increase in aggregate demand. 

At today’s meeting, the Council adopted the 2012 Annual Report of the Deposit Protection Fund, together with the financial plan and financial statements for 2012.