Montenegrin Public Debt Analysis

Analyzes · 27/05/2017

Montenegro is highly-indebted country. Its public debt increased three times over the last decade and reached 2.5 billion Euros at the end of 2016 or 68% of the GDP. Main burdens to the budget include construction of the highway, interest rates for previous loans, state guarantees for private companies and salaries for oversized public administration. The Parliament did not conduct oversight in this area, while the Government frequently ignores findings of the State Audit Institution. The Government does not provide clear public debt prognosis, only measures for its management – rationalisation of the public sector wages, harmonisation of tax policies and improvements in tax collection. However, international financial institutions estimate that the public debt might reach 3 billion Euro or nearly 90% of the GDP in the following three years.