Montenegro’s Finance Minister, Novica Vuković, has reported solid fiscal results for the first nine months of 2023, with total revenues reaching €2.07 billion — an 8.9% increase over the same period last year. Vuković emphasized that the country’s finances remain stable and reassured that the “Europe Now 2” program will not lead to inflationary pressures or price hikes.
Speaking on the “Link” program, Vuković explained that when excluding one-time revenues, the country’s income has increased by approximately 16% in 2023. He also highlighted a surplus of €85 million and noted that Montenegro has recorded the highest implementation of its capital budget to date.
Strong growth in key revenue streams
The finance minister pointed to impressive revenue growth in several key areas, including a 44% increase in corporate income tax, a 37.4% rise in personal income tax, and a 14.1% jump in VAT revenues. Additionally, excise duties grew by 14.3%. The gaming industry was a standout performer, seeing an 81% increase in revenue. Vuković revealed that a new law is being prepared to further regulate the sector, which will introduce new business segments.
He also praised the efforts of the Tax Administration and Customs, which have exceeded their collection targets. Vuković urged all citizens to contribute to the country’s growth by paying taxes, adding that there is a focus on reducing the informal economy.
Managing public debt and fiscal discipline
Regarding Montenegro’s public debt, Vuković stated that the government’s fiscal strategy aims to borrow only for maturing obligations and critical infrastructure projects. The gross public debt stands at 61.3% of GDP, with the net public debt at 52%.
The minister emphasized that the government has successfully managed its debt obligations, with €250 million serviced from current revenues. This has allowed the government to maintain a healthy level of liquidity. He also forecasted that Montenegro will benefit from lower interest rates when issuing new bonds, thanks to recent efforts with the World Bank and the country’s improved creditworthiness.
“Europe Now 2”: A boost for living standards without inflationary risks
Minister Vuković addressed concerns regarding the potential impact of the “Europe Now 2” program, stating that it will not jeopardize the country’s budget or economic stability. The program, he explained, is designed to raise living standards for citizens while stimulating the economy. He assured the public that fiscal measures have been carefully planned, with compensatory actions in place to manage any potential financial impact.
The government’s efforts to manage public finances have contributed to increased stability, with a budget surplus of €600 million, debt service being covered by current revenue, and a credit rating upgrade for the first time in 13 years. Vuković emphasized that Montenegro is on a positive fiscal trajectory and that the country’s financial health is steadily improving.
Wages and inflation: Maintaining a balance
Addressing inflation, Vuković explained that the “Europe Now 2” program aims to increase wages, control profit margins, and regulate prices, ensuring that citizens benefit from the program’s economic improvements. He pointed out that wages in Montenegro have increased by 63.3%, while inflation has risen by 24.8%, meaning that wage growth has outpaced inflation. This has benefited workers, and Vuković stressed that the government will continue to monitor prices closely to prevent any undue inflationary effects.
In conclusion, Vuković reiterated that Montenegro’s fiscal policies, along with the positive impacts of the “Europe Now 2” program, are contributing to a stronger economy. The government’s focus on sustainability, fiscal discipline, and social benefits is helping create a stable and growing economy that supports the well-being of all citizens.
