Maintaining price and financial stability to preserve the public’s confidence


The CBCG Governor Radoje Žugić participates in the Annual Vienna Initiative Forum hosted by National Bank of the Republic of North Macedonia (NBRNM) from 22 to 24 March in Skopje this year.

The NBRNM Governor, Anita Angelovska-Bezoska, opened the meeting. The speakers in the first panel session titled “Monetary and fiscal policy in a high inflation world”, were the CBCG Governor Radoje Žugić, the Governor of the Croatian National Bank, Boris Vujčić, the Governor of the National Bank of Slovakia, Peter Kažimir, the Finance Minister of the Republic of North Macedonia, Fatmir Besimi, and Vice President of the European Investment Bank, Lilijana Pavlova.

The meeting conveyed the message that “inflationary growth will slow down this year, both in developed and developing economies due to the stabilisation of raw material prices, reduction of supply side pressures and the monetary authorities’' decisive reaction".

“Signs of slowing down are already visible. Still, it is too early to declare victory over inflation. It is crucial to preserve price and financial stability, because this is the only way to preserve public trust. At the same time, financial systems should adapt to the transition to a green and digital future”, it was noted in the opening speeches at the first panel session.

The CBCG Governor referred to Montenegro’s situation, stating that one of the key internal factors affecting inflation is the recent wages increase not accompanied by productivity growth or the new value creation.

“Wage growth stimulated the demand, not only for products and services, but also for loans. To a certain extent, it stimulated inflationary expectations and acted in an inflationary direction. In the medium term, this may lead to an increased budget deficit, which is already difficult to service due to the deteriorated borrowing conditions,” added Žugić.

The “Vienna Initiative” is a platform connecting international financial institutions, banking supervisors and representatives of banking groups from Europe, present in Central and Southeast Europe. It was established by the coordination of the European Bank for Reconstruction and Development, the European Investment Bank, the European Commission, the International Monetary Fund and the World Bank during the first wave of the global financial crisis in 2009.

The governors of central banks from the Central and South-Eastern Europe region and high representatives of the European Investment Bank, the European Bank for Reconstruction and Development, the International Monetary Fund, the World Bank, the European Central Bank, and the European Commission, and representatives of the banking sector attended this year's Annual Forum in Skopje.