2024 BUDGET PRESENTED: FROM 1 JANUARY MINIMUM PENSION EUR 450

The Prime Minister of Montenegro, Milojko Spajić, and the Minister of Finance, Novica Vuković, and their team presented the proposal for the Law on Budget, which was adopted by the Government of Montenegro at today's 7^th session.

The Prime Minister said that no new Budget expenditure will be financed from debt except for the capital budget, which, as they pointed out, fulfills the "golden" rule of the budget that all current liabilities be financed from current revenues.

"In the next three years, a surplus of current consumption is planned, which means that the state will borrow exclusively for the repayment of old debts (for which EUR 1.6 billion is necessary in that period) and for the financing of capital projects, which affect further development, i.e. which create new economic value", said the Prime Minister.

At the conference, it was noted that the proposed budget, which is projected at EUR 3.4 billion would serve the following purposes:

✓ Improve the standard of pensioners by increasing the minimum pension to EUR 450  from 1 January 2024, which is an increase of 52%. "With this measure, we are restoring the right to a dignified life to our elderly citizens, who were most affected by inflation in the previous period, while their pension was only symbolically increased," they said.

✓ Start a strong investment cycle with a capital budget that is EUR 40 million higher than in 2023 and amounts to EUR 240 million. As they pointed out, the emphasis was placed on the beginning of the construction of the second section of the highway from Mateševo to Andrijevica, which will be financed in the amount of EUR 90 million in 2024.

✓ Only "mature" projects are implemented, i.e. those where the issue of expropriation has been resolved and the project documentation is ready. They said that they expected a total of 94 projects to be completed in 2024, while 80 are new projects, which, they said, would give momentum to investments.

✓ Improve regional development by allocating more money to municipalities in the north (an additional 10 million euros) through amendments to the Law on Financing Local Governments.

As they pointed out, all of the above will be achieved through fiscal consolidation, whereby savings on the expenditure side of the budget were achieved (despite a large number of new liabilities that were inherited: a larger fund of gross earnings of employees of EUR 40 million  due to employment in the previous period as well as EUR 30 million of additional costs based on interest on old loans, etc.) and by increasing budget revenues.

Bearing in mind the short deadlines and the obligation to enact the Budget by the end of the year, it was announced at the conference that additional measures and reforms would be the subject-matter of the fiscal strategy as the main strategic document for the duration of the Government's mandate.