Washington: World Bank and IMF support fiscal consolidation

Montenegrin delegation, consisting of Minister of Finance Darko Radunović, Governor of Central Bank of Montenegro Radoje Žugić and Vice Governor for Financial Stability and Payment Systems Nikola Fabris, met with World Bank Country Director for Southeast Europe Ellen Goldstein, World Bank Vice President for Europe and Central Asia Cyril Muller, Deputy Managing Director of the IMF Tao Zhang and Director of the IMF's European Department Poul Thomsen.

At the meeting with World Bank Country Director for Southeast Europe Ellen Goldstein and World Bank Vice President for Europe and Central Asia Cyril Muller, the officials discussed the implementation of the plan for medium-term fiscal consolidation and its structure on the revenue and the expenditure side, as well as the planned measures of active debt management, which provide its full sustainability in the medium term. Vice President Muller praised credible fiscal policy of the new government, which, in a responsible and timely manner copes with fiscal pressures and challenges of growing public debt. At the same time, he praised the holistic approach to the implementation of FSAP recommendations, which is, among other things, reflected in the preparation of legal solutions that significantly improve the institutional and legal framework of financial system control. Vice President Muller said that significant improvements in the fiscal position and strengthening financial stability create a real basis for improving the cooperation of the World Bank with Montenegro, by providing support through IBRD warranties to support fiscal reforms, which would further facilitate Montenegro's access to international capital markets in 2017.

Vice President Muller also praised the significant progress in the implementation of the projects for improving efficiency of the tax system aimed at tax revenues growth, as well as industrial waste management, which will contribute to the sustainable development of Montenegro. Montenegrin delegation received support regarding the health system reform, which would improve its efficiency and financial sustainability.

Deputy Managing Director of the IMF Tao Zhang and Director of the IMF's European Department Poul Thomsen supported fiscal consolidation and readiness for active public debt management. At the same time, IMF officials have warned of the risk of monetary policy normalisation in the US and Europe, which could lead to an increase in cost of borrowing on international capital markets, especially in developing countries, including Montenegro. Deputy Managing Director Zhang and Director Thomsen expressed IMF's readiness to support Montenegro in stabilisation of the public debt, implementation of the fiscal consolidation and reform of the financial system.

Montenegrin delegation participated in Spring Meetings of the World Bank Group and the International Monetary Fund in Washington from 21 to 23 April 2017.

Directorate for Human Resources and Public Relations/PR Service of the Ministry of Finance