The Ministry of Finance announced that it has secured €450 million to create a fiscal reserve for 2026 and 2027, in line with the Budget Law and this year’s borrowing decision. This ensures stable and timely budget support for all state debt obligations.
Montenegro’s total financing needs for 2026 and 2027 amount to €2.2 billion, including €1.6 billion for maturing debt and around €600 million for key capital and development projects. The year 2027 stands out, with exceptionally high debt repayments of around €1.2 billion.
The credit arrangement was concluded with several renowned international financial institutions, including Merrill Lynch International, MUFG Bank, Société Générale, OTP Bank, Erste Group, AKA Ausfuhrkredit-Gesellschaft, and Eurobank Private Bank Luxembourg. The loan was secured under favorable market conditions—a six-month Euribor plus a 2.5% margin, which currently results in an interest rate of about 4.5%. The loan matures in five years, with semi-annual repayment.
The Ministry stated that the agreement followed extensive analysis and consultations with international banks to achieve the most stable and favorable financing model.
Economist Prof. Dr. Vasilije Kostić, however, argues that the Government’s recent borrowings reflect not only inherited debt but also a growing consumption-oriented, populist policy. According to him, excessive spending forces the Government to take on new debt, which is socially irresponsible despite claims of favorable borrowing terms.
Kostić criticized the Government for presenting the 4.5% interest rate as highly favorable, noting that Montenegro’s projected GDP growth of 3.2% is insufficient to outpace interest costs. He emphasized that increases in GDP do not necessarily indicate real development or improvements in citizens’ living standards.
He warned that Montenegro is trapped in a cycle of constant borrowing, repayment, and further borrowing, similar to patterns seen in previous decades. Despite public debates, he believes the Government continues with minimal concern, knowing the discussions rarely lead to meaningful change.
All governments since 2006, he added, have been forced to borrow, but the key question is when, how much, for what purpose, and with what developmental results.
Earlier this year, the Government issued €850 million in bonds at an interest rate of 4.875%, and recently completed another €50 million domestic bond issuance, offering citizens a 3.75% annual return over two years.
According to the 2026 budget proposal, the state will face a €710 million deficit, to be financed through deposits and up to €500 million in new borrowing. The Ministry also has authorization for up to €1 billion in additional borrowing for debt refinancing and fiscal reserves, plus nearly €2 billion for 37 major infrastructure and development projects, including a new Clinical Center (€313 million), Velje Brdo (€120 million), Podgorica bypass (€100 million), railway modernization (€113 million), roads (€88 million), wastewater systems (€60 million), defense equipment (€250 million), and a national data center (€300 million).
