Lawmakers discussed the proposed budget law for this year and the decision on borrowing, emphasizing the need for quick adoption.
Finance Minister Novica Vuković stated that the baseline macroeconomic projections suggest an average annual real growth rate of 3.7% for Montenegro’s economy in the medium term, with growth projected at 4.8% this year, followed by 3.2% and 3.1% in 2026 and 2027, respectively.
“The government’s budgeted revenue is planned at 2.89 billion EUR, which is an increase of 102 million EUR, or 3.7%, compared to the estimate for last year,” Vuković said during the parliamentary debate on the budget proposal, borrowing decision, and amendments to the Law on Budget and Fiscal Responsibility.
Despite the reduction in tax burdens on wages, including lowering the pension and disability insurance contribution rate, Vuković noted that revenue growth is being driven by higher collection of VAT, excise duties, income and corporate taxes, gambling charges, and donations.
He added that total expenditures are planned at 4.03 billion EUR, an increase of 505.5 million EUR compared to the previous year.
Vuković further detailed the budget allocations, specifying 1.5 billion EUR for the current budget, 1.3 billion EUR for state funds, 280 million EUR for capital investments, 886 million EUR for financing transactions, and 43.5 million EUR for reserves.
“The planned capital budget is 280 million EUR, a 15% increase from the previous year,” Vuković said, noting that the budget deficit is projected at 3.5% of GDP, or 278 million EUR.
The government plans to borrow 900 million EUR this year, with 820 million EUR allocated for repaying past debts, primarily covering state bonds issued on international markets in 2018, due for payment in April.
To fund the deficit, the government will use deposits secured in the previous year, along with funds from the new borrowing.
Dražen Petrić, a member of the Europe Now Movement (PES), emphasized that the budget law for this year is crucial and must be adopted promptly.
“This time we didn’t adopt it in December, but we will do it soon. I firmly believe that we are not late and that we can preemptively address any potential damages by decisively holding this session,” said Petrić. He stressed that the key aspect of the budget is maintaining economic stability and creating conditions for further economic growth.
Petrić warned that failure to adopt the budget in the coming days would affect capital projects and slow down reforms, with the added risk of undermining the country’s credit rating. “We need to repay several billion from previous periods, and it’s important to maintain a good credit rating for debt repayment,” he said.
He also mentioned that the budget was executed at 99%, with revenues in November and December exceeding estimates by around 40 million EUR, demonstrating Montenegro’s fiscal stability.
Dejan Đurović from the Democratic Front (DF) stated that the proposed budget represents the sustainability and priorities of the ruling coalition and government, which focus on economic growth and long-term fiscal stability. He highlighted the increase in the minimum wage from 450 EUR to 600 and 800 EUR, calling it a historic moment for Montenegro.
“This policy is part of a broad reform package, investing in infrastructure to enable sustainable economic and societal development,” Đurović said, pointing to positive effects, such as increased employment and reduced informal economy.
He criticized previous governments for neglecting to raise wages and pensions, which led to a widening gap between the rich and poor. “The previous governments focused on short-term goals rather than the real needs of citizens,” Đurović added.
Boris Bogdanović from the Democratic Montenegro party mentioned that some members of parliament had reservations about adopting the budget, but that they had successfully cleared obstacles, restoring functionality to institutions that had been stagnant for years.
“In just 14 months, we’ve achieved impressive results,” Bogdanović remarked, listing increases in wages, pensions, and social benefits. He also reminded citizens of who had raised bread prices but lowered labor costs.
Mirsad Nurković, from the Bosniak Party, expressed hope that the delay in adopting the budget would not affect the law’s intended function of ensuring the society’s functionality and prosperity.
“With regard to macroeconomic projections from last year to 2027, the economic environment remains stable and favorable, with high growth rates in the last two years,” Nurković noted, emphasizing strong private consumption, increasing wages, improved business environment, and growth in the tourism sector.
However, he stressed the need to address the budget deficit in the future. “We have record-low debt levels in the last 12-13 years,” he added, pointing out that the capital budget this year is set at 280 million EUR, with 90 million EUR allocated for capital investments in northern municipalities.
Milan Knežević from the Democratic People’s Party (DNP) warned about delays in the construction of the second section of the highway, fearing that procedural delays could push the project back until 2026.
“While I strongly support the partnership with the EBRD, we need clear information from the Ministry of Finance and Monteput about the status of the second section, which costs 530 million EUR,” Knežević stated, expressing concern over the potential delay due to the European Commission and EBRD requesting the annulment of the prequalification tender.
Ilir Čapuni, from the Albanian Alliance, said that the proposed budget reflects the government’s economic policy and responsibility to citizens, the economy, and local communities. “It’s crucial to be realistic, prioritize, and ensure that resources are distributed equitably and efficiently,” Čapuni concluded.
