10 Nov 14
Montenegro to Hike Budget Spending in 2015
Montenegro has set a 2015 state budget at around 2 billion euros, a quarter higher than 2014, to cover loans for highway construction and repayments of previous loans.
Montenegro’s cabinet on Monday was due to approve the 2015 Budget Bill after the earlier agreed law was re-tuned.
The cabinet agreed to set a figure of 2 billion euros, an increase in the budget of 455 million euros compared to this year.
The government expects a budget deficit of 6.78 per cent, primarily due to the construction of a highway and the need to repay about 400 million euro in bank guarantees and loans from previous years.
Under the draft budget, the government next year may borrow up to 650 million euros to cover loan obligations and the budget deficit.
Around 240 million euros will be set aside to cover the budget gap, including 206 million euro in loans for the highway.
Montenegro will retain VAT at 19 per cent VAT and the government will continue to collect a “crisis tax” of 9 per cent on monthly wages over 480 euros.
“The intention is to secure stronger support for Montenegro’s priority development projects and encourage investors in order to stimulate economic growth and create new jobs,” the cabinet said in a statement.
The European Commission and the International Monetary Fund, IMF, in their autumn projections downgraded Montenegro’s growth forecast for 2015 from the 3.6 per cent anticipated in May to 3 per cent.
The Commission said it expected economic activity to pick up from 2016, however.
Source: Balkan Insight (Montenegro)