Presentation of the Assistant Minister of Finance, Mr. Milorad Katnić, M.Sc., on Milocer Development Forum

My presentation is focused on fiscal issues, fiscal policy and economic development. The current issue and challenges facing decision makers in Montenegro is the fiscal sustainability, while the long term issue which is of extreme importance is to define the future wellness of Montenegrin citizens, i.e. the fiscal policy which may be in function of the economic development. Basic features of Montenegro in last 10 years are pointing out that the state consumption was at relatively high level or absolutely high level and such consumption in its structure is negative from the aspect of possible reforms, because in its structure of the current consumption the nominative expenditures are dominant. The budget surplus in the last three years is 3% GDP, whereas the question is whether this surplus was a structural one or it was in one part the consequence of the cycles and tax revenues which are not structural. Indirect taxation is dominant, and direct taxes are linear, which from the aspect of the economic growth is less counteracting economic activities. Apart from current and past trends two important trends which will define the future fiscal policy are the challenge of aging of citizens and social contributions which interacting and the need for significant capital investments, in the first place the highway and highways, regional waste depony and any other investments which are necessary to execute in order to have a sound business environment for private investments and economic activity.