12 May 15
Montenegro Debt Level Hits New Record
Montenegro’s government debt has reached a new peak over the past 12 months, rising by 25 per cent to almost 70 per cent of GDP – following regular hikes in public spending.
The state debt of Montenegro at the end of the first quarter of 2015 reached 2.44 billion euros, almost 69 percent of gross domestic product, GPD, according to data from the Ministry of Finance. The debt has risen by almost 500 million euros, or 25 per cent, in one year.
The state debt includes money owed by central government, municipalities, many public enterprises companies in central and local ownership and the central bank.
Montenegro’s state debt back in 2007 amounted to only 27.5 percent of its GDP, or 737 million euros.
In terms of the debt, Montenegro owes most for the issue of Eurobonds – about 1.14 billion euros. The debt to the International Bank for Reconstruction and Development, IBRD, at the end of the first quarter amounted to 231.3 million euros. Credit Suisse was owed another 204 million and the European Investment Bank 103.1 million euro.
The size of the overall government debt, which includes external debt and money owed to domestic creditors, has long been a source of contention. The opposition has accused the government of concealing the real figure.
Zarko Rakcevic, a former Deputy Prime Minister and now leader of the opposition URA movement said that intensive consumer borrowing was the main factor responsible.
He claimed the size of the state debt was now almost 70 per cent of GDP, as the government maintained, but 72.7 per cent, adding in the 130 million euro owed by local governments.
“In the past two years alone, the state debt has increased from 50.91 per cent to over 72 per cent of GDP,” Rakcevic warned.
In April, the International Monetary Fund, IMF, predicted that the state debt could rise to 75 percent of GDP in the next four years.
Source: Balkan Insight (Montenegro)