Zugic: Reforms while preserving the growth and living standard

#RadojeŽugić #WorldBank #InternationalMonetaryFundImf #Reforms #MinistryOfFinance

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The World Bank and the IMF endorsed the plan of fiscal consolidation, as well as strengthening structural reforms and competitiveness of the Montenegrin economy. It is recommended that in creating fiscal measures special attention should be paid in order for them not to threaten the living standard of the most vulnerable social groups, as well as business conditions in Montenegro. the leaders of these international institutions told that to the Minister of Finance Radoje Zugic during his visit to Washington.

Zugic told the Voice of America that fiscal consolidation measures were not an aim themselves, but to reduce the risks of uncertainty and vulnerability.

“They should be reduced, but not at the expense of other priorities, such as the competitiveness of the economy. WB and IMF experts plan and support our consolidation measures, but point out that these measures must nit not jeopardise either the economic growth or the living standard”, said Zugic.

He said that WB and IMF’s suggestions were identical to what the Government suggested and concluded.

“We have to have a competitive economy, we need to expand the tax base in order to have the preconditions for stronger and more sustainable public finances, thus contributing to the healing of our overall economy”, said Zugic.

Speaking on the public debt, which exceeded the limits prescribed by Maastricht criteria, the minister said that rehabilitation of public finance, the deficit level and generated level of public debt was the aim of fiscal consolidation.

“The government has recently decided that current public spending can and should be financed only from the current public revenue. The emphasis is on competitiveness and structural reforms and through this model we will achieve our priorities. I am convinced that in this and the following term, the government will have the room for stronger and healthier public finances”, said Zugic.

He reiterated that the IMF had supported the idea of selling concessions for a part of the highway.

“If we manage to sell the concession for the highway, when the construction is completed then we will have absolutely sustainable public finances, the better the rating of the country and the greater availability of financial markets. There are many positive elements in this potential case. If not, we are preparing a number of measures on the revenue side of the budget, without compromising the competitiveness of the economy, as well as on the expenditure budget side without compromising the people’s living standard”, the minister explained.

As he pointed out, the World Bank planned €300m investment in the next four years, out of which at least €80m would be allocated for the private sector.

Source: Cafe Del Montenegro