Cabinet adopts macroeconomic analysis: Record income collected in Q1 2017, employment rises strongly, salaries and pensions rise

Spring analysis of macroeconomic developments and structural reforms – 2016 – Q1 2017, adopted by the Cabinet at its 32nd session held on 30 June 2017, shows, among other things, strong growth in the number of employees, increase in average net salaries and pensions, which are highest in the Western Balkans region.

According to Monstat data, GDP in the first quarter of 2017 amounted to EUR 747.5 million and was 3.2% higher in relation to the same quarter last year. This is, at the same time, one of the highest rates of economic growth in the region. The available data show the growth of all components of GDP, except for inventories.

Application of fiscal consolidation measures, defined by the measures for remediation of the budget deficit and public debt 2017-2021, gives positive effects, which are already visible in the first quarter of 2017. Budget revenues were increased in the first quarter of 2017 by 4.6% in relation to the same period of the previous year. The growth of banks' lending activities are also encouraging, as well as the growth of household deposits in relation to last year, as citizens of Montenegro, according to data at the end of April 2017, have EUR 1.6 billion euros of savings (or about 43% of GDP) in domestic banks.

The analysis showed that a record revenue collection was achieved in 2016. Data on the realisation of the central budget for May show that for the first time in this year the budget surplus in the amount of EUR 10.8 million. Data on the execution of the central budget for the five months of 2017 show that in the period January-May 2017, the budget deficit amounted to EUR 57.6 million or 1.5% of GDP. The preliminary budget deficit at the end of 2016 amounted to EUR 129.4 million or 3.4% of GDP and was lower by EUR 161.8 million than the deficit in 2015.

The latest budget revenue figures for June 2017 show that revenue collection growth continued, as a total of 135.2 million was collected, which is close to 10 million in nominal terms or 7.7% more than in June 2016.

In the period January-June 2017, revenues of EUR 682.8 million were collected, which is nominally 48.7 million or 7.7% more than in the same period of 2016 and, at the same time, as planned for this year. The fact that the collection of revenues at the planned level shows that the Fiscal Consolidation Plan, which the Cabinet has adopted, yields results.

Growth of exports of goods in the first quarter of 2017 compared to the same period last year amounted to 35.8%, while the growth of import of goods in the same comparative period was 19.6%.

The analysis showed that after the last year's record tourist season there was an additional increase in the number of tourist nights in the first quarter of 2017 by 8.3% and the number of foreign tourists arrivals by 10.3% compared to the same period in 2016. This has among other things contributed the most to the growth of export of services by 17.5% in the first quarter of 2017.

Growth in the first quarter of this year was also recorded in construction, which is 37.5% compared to the first quarter of 2016.

The analysis shows that the average salaries and pensions have been increased. The average net salary in the first quarter of 2017 was EUR 510, while in 2016 it amounted to EUR 499, while the average pension was EUR 286 – last year it was EUR 280. The analysis showed that the total employment is also increasing – the number of employees in the first quarter of 2017 increased by 7,167 persons or by 4.2% compared to the comparable period of the previous year.