World Bank praises Government's fiscal consolidation measures

Podgorica, Montenegro (2 February 2017) – World Bank commends the first steps of the Government of Montenegro in terms of strengthening fiscal stability and preserving economic growth, World Bank Director for the Western Balkans Ellen Goldstein told the press conference following her meeting with Prime Minister of Montenegro Duško Marković in Podgorica earlier today. She praised the serious and dedicated approach of the Government's reform programme concerning the sustainability of economic growth and job creation.

Ms Goldstein stated that today's meeting discussed the priorities of further cooperation, adding that the World Bank recommends three areas for future cooperation: fiscal and financial sustainability; development and stimulation of private sector and job creation; and environmental sustainability of the tourism sector. She emphasised that fiscal sustainability is the top priority.

Ms Goldstein said that, in order to maintain economic growth rate of 3%, 4%, 5% or even 6% and high level of job creation in the medium and long term, Montenegro need to tackle its fiscal deficit and public debt, describing the measures included in the budget for 2017 are audable and important.

She expressed readiness to continue close cooperation  with the Government of Montenegro, noting that certain reform measures will enable higher growth rates in Montenegro, stressing that the World Bank's assessment is that Montenegro's fiscal consolidation should be at the level of 2-3% of GDP annually in the next three year, said Ellen Goldstein.

World Bank Director for the Western Balkans concluded that representatives of the institution and the Government are expected to review the measures set out in the World Bank analyses that can be taken into account in the further strengthening of Montenegro’s fiscal stability in the medium term in order to obtain the budgetary support of the World Bank.

The Prime Minister said at the joint press conference that the key objectives of the Government are sustainable economic growth, employment and standard of living.

"Government will take a combination of economic policy measures aimed at strengthening macroeconomic stability and improving the competitiveness of our economy. In that context, today's meeting focused on the most important challenges in the achievement of development objective of Montenegro, particularly those measures aimed at strengthening fiscal stability and sustainability," said Prime Minister Marković.

The Prime Minister said that, in addition to measures of fiscal consolidation, the Government will intensify actions aimed at boosting the business environment and supporting the real sector in order to strengthen the investment activity in the country and achieve the projected average annual growth of 3.4% in the next three years.

"In that regard, we expect further support from the World Bank, as an important and credible partner that has identified cooperation with our country in its Strategic Partnership Framework for the period 2016 - 2020. At the same time, we appreciate the recently submitted Analysis containing recommendations of the World Bank for further reforms in Montenegro and the readiness of the institution to support the Government in strengthening fiscal stability necessary for sustainable economic growth and job creation."

Prime Minister of Montenegro concluded that the Government of Montenegro expects support from the World Bank through the approval of a loan for development policies amounting to 90 million USD, which can be used to provide guarantees for the financing of the budget needs.