Delegation of Montenegro at the Annual Meeting of the IMF and the World Bank

14/04/2023

Montenegro’s delegation, led by the CBCG Governor Radoje Žugić and the Minister of Finance Aleksandar Damjanović, is attending the International Monetary Fund (IMF) and the World Bank (WB) annual meeting held in Washington.

At the meeting with Bo Li, Deputy Managing Director at the IMF, they discussed the current economic situation in Montenegro and the main monetary and fiscal policy challenges.

Governor Žugić and Minister Damjanović presented Mr Li and his team with the latest data on the financial and fiscal sector and the leading real economy ratios. They noted that the country preserved its economic and financial stability despite numerous internal and external adverse factors. The speakers expressly referred to the wage increase initiated by the earlier tax reform, which contributed to the inflation growth in Montenegro to a certain extent, in addition to other factors.

Governor Žugić pointed out that the banking system was sound, and its key business indicators recorded positive trends. “In this way, the banks in Montenegro contribute to the overall country’s financial system soundness and stability”, announced Žugić. He pointed out that the banking sector notably recorded a non-performing loans decline with intense credit activity despite the challenging macroeconomic environment and fiscal risks. Newly approved loans grew by 31.5% last year.

Minister Damjanović pointed to positive public finances trends, characterised by the growing tax revenues in January-April this year, 30% higher compared year-on-year. He emphasised that the share of public debt in GDP decreased. Still, the liquidity required for the regular settlement of all current obligations, including increased wages in the public sector, was high.

Minister Damjanović also pointed out that adopting a set of laws the Ministry of Finance initiated created a favourable environment for expanding tax coverage and generating new revenues without increasing the current tax rates.

The Montenegrin delegation invited Mr Li and his associates to participate in the Belgian-Dutch Constituency Annual Meeting hosted by Montenegro this May. The meeting will bring together the IMF and the World Bank high-level representatives, the Constituency members’ officials and numerous prominent finance experts.