21.5 C
Herceg Novi
Tuesday, October 8, 2024
spot_img
Supported byspot_img
spot_img
NewsFinance Minister addresses retail bonds, pension adjustments and economic outlook

Finance Minister addresses retail bonds, pension adjustments and economic outlook

Finance Minister Novica Vuković spoke to Bankar.me about potential government borrowing options, including issuing retail bonds by the end of the year. According to Vuković, retail bonds would allow citizens to invest excess funds under more favorable conditions compared to commercial banks.

He highlighted that in Montenegro, the average net salary has increased by 20.2% more than inflation, preserving citizens’ living standards. Vuković also announced that the Fiscal Strategy forecasts further real wage growth, especially in 2025, aligned with projected inflation rates and significant wage increases.

Regarding pension concerns, Vuković assured that the reduction in contributions will not affect future pensions. He explained that pension calculations have not changed, and there is no basis for claims that pensions will be reduced. From January, pensions will increase by approximately 7-8%, or around 50 euros on average, with adjustments continuing throughout the year.

Supported byElevatePR Digital

Vuković emphasized that the trend of good revenue collection for all budget categories persists. He reaffirmed that no new budgetary expenditures will be financed through borrowing, except for capital investments, adhering to the budget’s golden rule of financing current obligations from current revenues.

He also addressed the negative trends in Montenegro’s foreign trade balance and foreign direct investments (FDI). Vuković attributed these trends to a low domestic production base, an open economy and liberalized trade and investment flows. The trade deficit decreased from 45.1% of GDP in 2022 to 43.6% of GDP in 2023. However, the high deficit reflects reduced export activities, particularly in electricity and aluminum, and increased imports for personal and investment consumption.

Preliminary data for January-April 2024 shows a net inflow of foreign direct investments of 161.8 million euros, down 9.9% from 2023. The total FDI inflow was 289.9 million euros, a 3.9% decline, attributed to decreased investments in real estate and increased outflows. Despite this, investments in companies and banks rose by 25.6% in the first four months of 2024.

Montenegro’s economy continues to exhibit positive trends, with overall investment increasing. Economic growth in the first quarter of 2024 was 4.4%, significantly higher than the EU average of 0.1%. Investments showed recovery with an 8.2% increase compared to the same period last year.

To strategically plan macroeconomic policy and accelerated development, Vuković stressed the need for systemic measures and reforms to enhance competitiveness and productivity. The government is implementing structural reforms and projects, with the upcoming Fiscal Strategy document outlining tax policy changes to reduce the burden on employers and create a more competitive investment environment.

Supported byMercosur Montenegro

RELATED ARTICLES

Supported byElevatePR DIgital
Supported by
Supported by
Supported by
error: Content is protected !!