Regular spring meetings with the IMF and the World Bank begin


08/04/2021

On the first day of regular International Monetary Fund and the World Bank spring meetings, held in a virtual format due to the COVID-19 pandemic-caused circumstances, the Montenegrin delegation led by CBCG Governor, Mr Radoje Žugić, and Minister of Finance and Social Welfare, Mr Milojko Spajić, held meetings with high-level IMF officials. 


During the meeting with the IMF Executive Director Paul Hilbers, Minister Spajić and Governor Žugić informed their counterparty about Montenegro’s current macroeconomic and financial situation strongly adversely affected by the coronavirus pandemic. They also debriefed the measures taken by the Government and the Central Bank to support the economy and population.


Minister Spajić pointed out that the overall economy’s recovery will largely depend on this year’s tourist season success. In that sense, “it is crucial that the State provides adequate support to the tourism sector for the season preparation and accelerates the started population’s immunization. Fiscal stimulus and support to the economy should continue in the second quarter of this year. Keeping the jobs and companies in the service and other GDP driving industries is the Government of Montenegro’s priority in the future,” said Spajić.


This January, the Government of Montenegro adopted a new support package for the economy and citizens, worth some 165 million euros.


Minister Spajić thanked the IMF representatives for commending the Government of Montenegro’s results so far, adding that Montenegro was taking a step in the right direction.


Governor Žugić pointed out that the CBCG has implemented seven packages of measures to mitigate the pandemic consequences. Through their implementation, the banking sector has “ceded” liquidity to the population and the economy. “We are facing a very challenging period. Thereby, all future measures as the previous ones must be designed carefully and cautiously to preserve the financial sector’s stability without which no economic recovery would exist,” said Žugić.


“Montenegro is in the group of countries heavily affected by the pandemic,” said Director Hilbers. He told “to be very careful when defining new measures and consider their sustainability and their adequate duration.”


The Montenegrin delegation also had a meeting with the Director of the IMF European Department, Alfred Kammer.


Minister Spajić presented the current year’s budget proposal basics and other plans related to the fiscal policy in the coming period to his counterparties. They also discussed the possibility of providing IMF technical support during the next budget’s defining and agreed to pay attention to this topic in the coming period.


Governor Žugić thanked Mr Kammer for the excellent cooperation, especially for the recently completed IMF mission on CBCG safeguards. The mission assessed the CBCG as an institution with strong operational controls in the five most important areas. He also thanked the IMF for technical assistance in drafting a new CBCG law. Kammer congratulated the Governor on taking the proper steps to “building a strong and credible institution”.


The delegation had a concluding meeting with Tao Zhang, Deputy Managing Director of the IMF. The meeting topic was a discussion on fiscal policy and activities on preserving the banking sector’s stability.


Mr Zhang commended the successful Eurobond issue and stressed that the population’s immunization is a priority for all countries and the only way to overcome the complex health and economic situation. He welcomed the announced continuation of economic measures in Q2 and the priority the Government places on fiscal responsibility.