Montenegro’s Finance Minister, Novica Vuković, has confirmed that the planned increases in minimum wages and pensions will not be financed through borrowing, as the country is meeting its current obligations through existing revenue.
“The increase in minimum wages and pensions will not be financed by debt. This decision aligns with the strategic goals of the 44th Government, which aims to improve the quality of life for all citizens. I also want to stress that there will be no increase in the general VAT rate,” said Vuković in response to a question from MP Zdenka Popović of the Democratic Party, during a parliamentary session.
According to Vuković, preliminary data for the first nine months of 2024 show a significant increase in budget revenues.
Popović had asked about the state of public finances following the planned hikes in minimum pensions and the upcoming rise in minimum wages to €600 and €800, respectively.
For the period in question, Vuković reported that budget revenues amounted to €2.07 billion, an increase of €169.9 million or 8.9% compared to the same period last year.
“The current financial situation in Montenegro is stable and favorable, with macroeconomic stability being the dominant feature. We continue to see a growing trend in budget revenue collection, with a budget surplus of €85 million (1.2% of GDP) for the first nine months,” Vuković said.
He also highlighted that the government expects further revenue growth, supported by changes in tax policy, a broader tax base, and stronger efforts to combat the shadow economy. This is expected to contribute to continued financial stability and sustainability.
Looking ahead, Vuković confirmed that the Ministry of Finance will continue focusing on creating a sustainable fiscal and macroeconomic framework, achieving budget surplus, reducing non-productive spending, and boosting revenue to support economic growth through developmental projects.
“The government’s priority is to ensure that all current obligations are funded from current revenues, with borrowing reserved solely for financing capital projects that drive projected economic growth,” he added.
Vuković also pointed to positive assessments from major credit rating agencies, such as Moody’s and Standard & Poor’s, which recently upgraded Montenegro’s credit rating, further establishing the country as an attractive investment destination with a stable and predictable economic environment.
“The Ministry of Finance continuously monitors and analyzes key economic indicators, showing high economic growth, record-low unemployment, and alleviating inflationary pressures,” concluded Vuković.
