Montenegro: 2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Montenegro

September 10, 2019

Preview Citation

Format: Chicago

Montenegro: 2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Montenegro, (USA: International Monetary Fund, 2019) accessed October 12, 2024

Summary

This 2019 Article IV Consultation with Montenegro highlights that while the implementation of large publicly financed infrastructure projects has added economic growth, the accompanying use of fiscal resources has contributed to a large increase in government debt including guarantees, which reached 79 percent of gross domestic product in 2018. Despite the recent intervention in two non-systemic domestic banks, the overall banking sector exhibits improving asset quality, strong credit growth, high liquidity, and is well capitalized. Efforts to improve banking and Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) supervision are paramount. The emphasis should be a shift to risk-based tools for supervision in both off-site and on-site functions, and the establishment of a stronger supervisory structure within the central bank. The main priorities are reduction of the labor tax wedge and implementation of the new labor law that aims to increase labor market flexibility. Future decisions on the minimum wage should consider a broad set of indicators and require careful analyses of the impact of past increases.

Subject: Banking, Capital spending, Expenditure, Fiscal consolidation, Fiscal policy, Fiscal stance, Public debt

Keywords: Authorities' effort, Authority, Banking sector supervision, Capital spending, CBM balance sheet, CR, Debt, Development goal, Europe, Fiscal consolidation, Fiscal stance, Global, ISCR, Liability positions vis-à-vis nonresident, MONSTAT, MONSTAT report, Montenegrin authorities, Montenegro

Publication Details

Pages:

88
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2019/293
Stock No:

1MNEEA2019003
ISBN:

9781513513720
ISSN:

1934-7685

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