Regular Annual Consultations with the IMF
29/01/2024
The CBCG Governor Irena Radović, PhD, and her team held the introductory meeting with the IMF delegation led by Srikant Seshadri, the Head of the IMF Mission for Montenegro. The IMF team is visiting Montenegro as part of its Article IV Consultation. This is a regular annual mission during which the IMF collects data on a country’s economy, outlook and policies.
Presenting the trends characterising the macroeconomic environment in Montenegro to the IMF representatives, Governor Radović noted that the CBCG projected Montenegrin economy’s growth of 5.7% in 2023, mainly due to increased public spending fostered, inter alia, by the significant non-residents inflow and increased salaries in the country. Tourism, industrial output and retail trade recorded positive trends last year, whereas construction declined in the first nine months of 2023.
“In 2023, the banking sector remained sound, liquid, adequately capitalised and profitable”, the Governor highlighted, adding that key balance items – banks’ assets, loans, deposits, and capital increased compared to 2022. At the end of December 2023, non-performing loans accounted for 4.99% of total loans or 0.72 pp less compared to 2022.
“During the coming period, the CBCG will focus on further harmonising national legislation with the acquis communautaire and implementing international standards to preserve the country's financial stability and further strengthen the CBCG’s independence”, Governor Radović highlighted. “To this end, we highly appreciate the cooperation with the IMF through which we will jointly recognise and address all possible challenges”, the Governor concluded, thanking the IMF representatives for the multi-annual assistance they have provided to the CBCG through recommendations and technical assistance programmes.
She highlighted her commitment to including women in economic decision positions and their empowerment for equal participation in economic life. She expressed her belief in enriching the cooperation between the CBCG and the IMF in this segment as “reducing the gender gap will undoubtedly contribute to strengthening the economy and improving the life quality in Montenegro”. She also noted that green transition and climate financing are priority directions for developing the Montenegrin financial sector, and the CBCG would consider cooperation in this area with the IMF highly beneficial.
Mr Seshadri noted that the objective of the upcoming discussions with the representatives of the CBCG, the Government and other institutions will be to assess economic conditions and the strategic direction of economic policies over the medium-term. The IMF team thanked the Governor and her team for their hospitality, expressing the IMF’s readiness to continue supporting the CBCG and Montenegro in improving macroeconomic conditions and preserving the financial system’s stability.
At the end of the visit, the IMF team will issue to the public, a Concluding Statement which is a preliminary summary of its findings. A more detailed report will follow subsequently.