The banking sector remained stable in 2023, with key balance sheet positions – bank assets, loans, deposits, and capital – experiencing growth compared to 2022, announced Irena Radović, the governor of the Central Bank of Montenegro (CBCG). Non-performing loans accounted for 4.99% of total loans at the end of December, which is 0.72 percentage points lower than in 2022,” she added.
As stated by the Central Bank, Governor Irena Radović, along with her team, held an introductory meeting with a delegation from the International Monetary Fund (IMF), led by Srikant Seshadri, the head of the IMF mission for Montenegro.
The IMF team is in Montenegro for the regular annual consultations under Article IV of the IMF’s Articles of Agreement. This is a routine mission where the IMF gathers current information on the state of the economy, prospects, and policies of its member countries at least once a year.
Presenting key trends characterizing the macroeconomic environment in Montenegro to representatives of the IMF, Governor Radović emphasized that, according to the CBCG projections, the growth of the Montenegrin economy in 2023 amounted to 5.7%. The largest contribution came from the increase in private consumption, driven, among other things, by the influx of a large number of non-residents and wage growth in the country. Positive trends were recorded in the tourism, industrial production, and retail trade sectors in the past year, while, according to data for the first nine months of 2023, the construction sector experienced a decline.
The banking sector remained stable, liquid, adequately capitalized, and profitable in 2023 – highlighted the governor. She added that key balance sheet positions – banks’ assets, loans, deposits, and capital – recorded growth compared to 2022.
Non-performing loans accounted for 4.99% of total loans at the end of December 2023, which is 0.72 percentage points lower than in 2022.
The CBCG’s work in the coming period will be focused on further aligning national regulations with EU standards and implementing international standards to preserve the country’s financial stability. Additionally, there will be an emphasis on strengthening the independence of the Central Bank – emphasized Governor Radović.
On this path, we highly appreciate the cooperation with the IMF, through which we will jointly identify and address all possible challenges – concluded the governor. She expressed her gratitude to the representatives of the IMF for their long-term assistance provided to the CBCG through recommendations and technical assistance programs.
Governor Radović also emphasized her dedication to the inclusion of women in positions of economic decision-making, empowering them for equal participation in economic life. She expressed the expectation that the collaboration between the CBCG and the IMF will be enriched in the future in this regard since “reducing the gender gap can undoubtedly contribute to strengthening the economy and improving the quality of life in Montenegro.”
She also emphasized that green transition and climate finance represent priority directions for the development of the Montenegrin financial sector. Collaboration with the IMF in this segment would be of exceptional benefit to the CBCG.
Seshadri highlighted that the goal of the upcoming meetings with representatives of the CBCG, the Government, and other institutions would be to assess the economic conditions and the strategic direction of Montenegro’s economic policies in the medium term.
The IMF team expressed gratitude to the Governor and her team for their hospitality, expressing the IMF’s readiness to continue supporting the CBCG and Montenegro in improving the macroeconomic situation and preserving the stability of the financial system.
At the end of the visit, the IMF mission will issue a concluding statement with preliminary conclusions. A more detailed report will follow thereafter.
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