Meeting with the World Bank Team Held
07/09/2017
The Governor of the Central Bank of Montenegro and his associates, received the World Bank team led by Mr Emanuel Salinas, Head of the WB Office for Montenegro.
Governor Žugić informed the World Bank team about the current macroeconomic situation and the situation in the financial system. He emphasized that CBCG is the only institution that has not changed its GDP growth projection and that it has proved to be correct so far, as growth for the first 6 months is 4%. He expressed expectation that the data for the third quarter will be even better and that even higher growth can be expected. He pointed out that foreign direct investments increased by 40% compared to the same period of the previous year and that the current account deficit of the balance of payments was lowered by more than 5%. He also pointed out that great progress has been made with the adoption of a fiscal strategy, at the same time being convinced that it will be fully implemented.
He said he fully agrees with the IMF's assessment that the financial system has been significantly improved. The NPL level after its maximum of over 25% in 2011 was reduced to 8.2% at end-July, the capital of banks reached the level of half a billion euros, the banks are highly liquid, the credit activity has revived, and deposits are 400 million higher than loans, which indicates healthy sources of financing.
He also stated that the CBCG prepared a set of laws (CBCG Law, Amendments to the Banking Law, Bank Resolution and Recovery Law, Law on Voluntary Financial Restructuring and Law on Financial Institutions), which will significantly improve the environment.
Head of the WB Office for Montenegro, Mr Salinas, pointed out that significant progress was made. He mentioned that the World Bank guarantee program consists of two equally significant pillars, macroeconomic and financial stability, and that progress has been made in both of these. It was noted that there is a high degree of matching of the points of view and agreed that the discussions should continue during the annual IMF meeting.