The Summit of Central Bank Governors, Ministers of Finance and Directors of Tax Administrations of the Countries of the Region Begins in Budva

29/05/2023

The Summit of Central Bank Governors, Ministers of Finance and Directors of Tax Administrations of the Countries of the Region, organised by the Serbian Association of Economists with the Belgrade weekly NIN as the leading media partner, started in Budva today. “Financial and Monetary Stability of the Region in Uncertain Times of Prolonged Geopolitical and Economic Crisis” is the theme of this year’s Summit, sponsored by the CBCG, the Ministry of Finance and the Revenue and Customs Administration of Montenegro.

Opening the Summit, CBCG Governor Radoje Žugić pointed to the importance of such gatherings. He noted they were a “precious opportunity for exchanging opinions and experiences of the region’s countries, especially in uncertain and challenging times like the present, when our economies are exposed to multiple external and internal risks”.

In the Summit’s introductory part, the President of the Serbian Association of Economists, Aleksandar Vlahović, presented the macroeconomic trends in the global economy, the countries of the euro area, and the Western Balkans, and projections for the next period. “Although inflation is tailing off, and major economies have achieved better results compared to expectations from 2022, numerous risks, such as the uncertainty of the further course of the war in Ukraine, a possible real estate market ‘bubble burst’ and the adverse effects spillover, and the debt crisis in over-indebted countries”, emphasised Vlahović in his presentation, still exist.

After the meeting’s official opening, central bank governors attended a panel titled “Maintaining the Stability of Prices and the Banking System in Uncertain Times”. As part of the panel, governors and vice-governors from eight countries in the region spoke, inter alia, about monetary policy instruments aimed at curbing inflation, preserving price and financial stability, providing support for economic growth and development, cooperation between fiscal and monetary authorities, and many other issues.

The panel participants agreed that curbing inflation and future general economic developments would depend on three key factors – the further global geopolitical situation development, the degree of individual economies’ vulnerability to external shocks determined by their structural adjustment, and the macroeconomic policies’ effectiveness achieved by adequate monetary and fiscal policies cooperation. They also stated that, in addition to the key objectives of preserving price and financial stability, the central banks’ responsibility refers also to providing adequate economic growth and development support to accelerate convergence with the European Union member states. With rising interest rates, which can lead to increased non-performing loans, monetary authorities must be careful about protecting clients and continuously monitor the assets’ quality to assess the need to respond appropriately.

On the second day of the Summit, panels of ministers of finance and directors of tax administrations of the region will be held, which will discuss public finances, provision of assumptions for economic growth, and tax administration reform and modernisation.