Results of economic activity in first five months are encouraging

Prime Minister Duško Marković expressed his satisfaction with the implementation of Fiscal Consolidation, which shows that respectable results in the growth of state income and employment rates ,as well as significantly higher tax discipline of all subjects have been achieved.

"Only in the first five months of this year the total tax collection is higher by EUR 39.14 million or by 7.7% than in the same period of 2016," the Prime Minister said at the 28th Cabinet session held on Thursday, 1 June 2017, adding that it is, for comparison, almost 70% of the budget of the Directorate of Public Works. In other words, increased collection of taxes and contributions compared to last year amounts to 70% of the costs for public works in 2017 - the Prime Minister said.

Significant budget revenues growth

Minister of Finance Darko Radunović briefed the Government on data which show that only in last month (May) EUR 125.3 million were collected, which is 14% more than in May last year and 5% more in comparison with the plan for this year.

"This information encourages me. It seems to me that we have succeeded in establishing a system of fiscal discipline, though not to the extent that it would be possible. It could be more and better than this, but it is important that we do not have any downfall, " the Minister of Finance said as the Cabinet session.

The Government is also aware of the fact that the original budget revenues amounted to EUR 547.94 million in the first five months and that almost all types of tax revenues were up compared to last year, as well as income contributions, to which, among other things, significantly contributed fiscal consolidation measures envisaged by the Budget deficit and public debt remediation plan.

At the meeting, held after the Cabinet session, on the analysis of the results of fiscal consolidation, it was concluded that the data from the analysis of the previous fiscal consolidation measures show that the Government has set a good course and has rationally assessed the situation and determined the measures it has taken.

When it comes to the central budget realization for the first four months of 2017, besides the revenues realization in respect of the plan and their growth compared to the same period of 2016, budget expenditures amounted to EUR 490.4 million, which is at the level of expenditures in the first four months of 2016. This indicates that the goal of slowing the growth of current consumption has been achieved - it was noted with the conclusion that the budget expenditures realization is lower than planned for the period January - April 2017. This has contributed to the reduction of central budget deficit to EUR 67.8 million or 53% in respect of the plan. The deficit is smaller by about 24 million compared to the same period of 2016. The fact that the current budget expenditures are lower than planned, as well as that their growth has been stopped compared to the same period of the previous year, is assessed as encouraging. Certainly, the planned realization of this year's capital budget for development needs will also affect the fulfillment of the 2017 capital expenditures plan and the overall deficit – it was concluded at the meeting.

Increase in number of employees

Data on the average number of employees in the observed period show an upward trend.

In the first four months of 2017, the number of employees was 179,160, which is 4.1% or 7,121 more than in the same quarter of 2016. At the same time, this is by 28,360 employees more than in 2006, when we restored our independence. Increased economic activity and intensified efforts to fight against the informal economy contributed to the increase in the number of employees in the first four months compared to the comparative period of 2016.

The meeting emphasised the Government's determination to further focus on measures to reduce unemployment, particularly fictitious, as well as to stimulate greater labour market activity by redefining social policy measures.

We have initiated changes to legal solutions such as changes to the Law on Health Insurance, so that health insurance would not be a condition for a person to be on unemployment record if he or she does not actively seek employment. This should also contribute to the redefinition of social policy measures through amendments to the Law on Social and Child Protection, which will increase support for socially vulnerable categories of citizens, while stimulating higher activity on the labour market. In addition to changing legal solutions that counteract fictitious unemployment, measures of active employment policy have contributed to the final stoppage of the two-year vertiginous growth of the number of unemployed in the records of Employment Agency of Montenegro. According to the administrative data (Employment Agency of Montenegro), the number of unemployed persons, after the record of 53,070 persons at the end of April (which was the highest unemployment since restoring independence), on 29 May 2017, was reduced to 51,944 or 22.39%. Particularly encouraging is the fact that the trend has finally been established to reduce the number of unemployed women – it was said at the meeting.

Earnings are also growing

Average gross earnings for the first four months increased to EUR 510 compared to EUR 492 in the same period last year.

The average net earnings in April 2017 were increased to EUR 512.

Stronger control of catering facilities, bakeries and fast food facilities

Data, however, are suggesting a recent trend of distortion of fiscal discipline, i.e. avoiding the issuance of fiscal accounts, particularly in catering facilities, bakeries and bakery retailers, "fast food" facilities and other similar service facilities. In this regard, the need for rigorous control by the competent inspection services has been emphasised, with a clearly defined policy that in cases of repeated offenses of this type there can be no mitigating circumstances or any tolerance, but must be treated in accordance with the previously stated goal: "Not a single euro of state money must end in private pockets."

PUBLIC RELATIONS SERVICE OF THE GOVERNMENT OF MONTENEGRO