Montenegro is set to repay two billion euros of old debt in the next three years, with the Finance Ministry planning to refinance a large portion of this debt through new borrowing. This approach has been criticized by the opposition, who argue it reflects irresponsible economic policies, while the government insists it is the only solution given that the debt was inherited from the previous administration, as reported by TVCG.
The money Montenegro already spent, for which it borrowed, is now due for repayment. The bulk of the debt to be paid off in the coming years comes from the issuance of foreign and domestic bonds, loans from China’s EXIM Bank for the Bar-Boljare highway, a loan from Deutsche Bank taken in 2023, and World Bank loans.
“In the next three-year period, around two billion euros will be due for repayment from the previous period. The years 2025 and 2027 are particularly challenging as the highest amounts are due then,” said Andrijana Ulić Rajković from the Ministry of Finance.
In 2025, Montenegro will need to repay 792 million euros, while in 2027 the figure will rise to 915 million euros. In 2026, the country is expected to return 265 million euros. Part of the debt will be covered by the fiscal reserve for the upcoming year, amounting to 350 million euros, with the remainder to be secured through new borrowing. “The Ministry of Finance is negotiating with the World Bank for a guarantee, which will serve as the basis for securing credit arrangements with commercial banks amounting to 250 million euros. The majority of the missing funds will be secured through bond issuance, both on the international and domestic markets,” Rajković emphasized.
Government officials argue that using new loans to repay old debt is the only way to settle inherited liabilities, while the opposition claims this approach is a result of poor economic management.
“If GDP were higher, if there were more employment in the private sector, and if the economy were functioning on solid foundations, we could repay what we owe quickly. Our public debt will increase to 65 or nearly 70 percent of GDP. This indicates we are already facing challenges in meeting economic criteria for EU accession,” stated Nikola Milović from the Democratic Party of Socialists (DPS).
“The state must repay what it owes, but the real question is why it borrowed so much in the first place. This is something that investigative bodies or the Special State Prosecutor’s Office could look into. Especially the huge debt taken for the highway project, which amounted to one billion euros, while the initial cost for the tunnel was around 486 million euros,” said Dejan Đurović from the New Serbian Democracy (NSD).
Montenegro’s public debt has been steadily increasing since the country’s independence. In 2006, it stood at 700 million euros, and by 2020, it peaked at 4.4 billion euros, or 105% of GDP.
