Press release from 66th Cabinet session

PHOTO: 66th Cabinet session

At its 66th session, chaired by Prime Minister Duško Marković, the Cabinet approved the Proposal of the Law on Amendments to the Budget Law of Montenegro for 2018 and the Proposal of Montenegro's borrowing for 2018.

The budget changes came as a result of the efficient collection of revenues and good results of the Government's economic policy in the previous year and the strengthening of macroeconomic stability. The Cabinet estimated that these facts, along with a positive relation of the financial markets towards Montenegro should be used to refinance debt under more favourable conditions.

The proposed law increases the original income by EUR 57 million and expenditures by 82 million, and the total amount of the budget amounts to EUR 2,086,134,964.15. Consequently, the budget deficit amounts to EUR 139.14 million or 3.16% of the estimated Gross Domestic Product in 2018.

On the revenue side, the revenue from value added tax was increased by 10 million, profit tax by two million, international trade tax and transactions by 1.6 million, while revenue from property taxes was down by 1.6 million. Income tax is lower by EUR 13 million, while contributions for pension and disability insurance are increased by EUR 11 million. The revision is expected to increase revenue from donations by EUR four million and capital gains by EUR 43 million.

On the expense side of the current budget, the amount of up to 70 million is planned for the purchase of a part of the shares of Montenegrin Electric Enterprise AD Nikšić (EPCG) by the state, 6.5 million for the due obligations of the Montenegro Airlines and Crnogorska plovidba, and EUR 500,000 for the promotional activities of the National Tourist Organization, as well as four million for implementation of public administration reform.

The capital budget, with the aim of supporting healthcare, is increased by EUR 1 million for the construction of the Mental Health Clinic of the Clinical Centre of Montenegro.

The proposal of the Decision on Borrowing for 2018 defines the credit arrangements that can be concluded in 2018 for the implementation of the projects, the limits for the issuance of guarantees, and the limits of the overall borrowing for debt refinancing, budget financing and the creation of reserves.

The Cabinet unanimously adopted the proposed agenda. During the discussion, with the participation of several members of the Cabinet, full support for the credible economic policy of the Government was expressed, with the special note that such a policy not only yields results, but also enjoys the support of international financial institutions and organizations.

The Prime Minister concluded that today's decision is not a product of hastiness but the result of the well-thought approach, the concept and the strategy of stabilization of public finances, which the Government defined in December 2016 and that thanks to the achieved results, the Government is able to make decisions which reduce the cost of public debt repayment to half.

PUBLIC RELATIONS SERVICE OF THE GOVERNMENT OF MONTENEGRO