Annual Constituency Meeting in Tivat Continues

26/05/2023

Achieving and preserving economic stability against the backdrop of high inflation and multiple external risks and the issue of migration in light of their impact on economic development in the countries of origin and countries receiving refugees were the key topics discussed during the second day of the Annual IMF and the World Bank Belgian-Dutch Constituency Meeting held in Tivat and hosted by the Ministry of Finance and the CBCG. In the sessions concerning these topics, along with the ministers of finance and central bank governors of the Constituency member states, the speakers were the De Nederlandsche Bank (DNB) President, Klaas Knot, the Director of the European Department of the IMF, Alfred Kammer, and the Director in the World Bank, Xavier Devictor.

As part of this important event gathering representatives of the Constituency's 16 member countries monetary and fiscal authorities, the Montenegrin delegation led by the Minister of Finance Aleksandar Damjanović and the CBCG Governor Radoje Žugić held a bilateral meeting with senior World Bank officials - Antonella Bassani, Vice President of the Europe and Central Asia Region at the World Bank, Alfonso García Mora, Vice President of World Bank's International Financial Corporation (IFC), and Koen Davidse, Executive Director.

Governor Žugić informed the World Bank representatives about the current situation in Montenegro's banking sector, presenting the latest data on the key banking operations ratios, which record historically the most favourable values, except for interest rates that are on a slight rise due to high inflation and the growth of Euribor as a reference interest rate. The Governor thanked the World Bank for support to the CBCG by implementing several technical assistance projects to introduce the instant payment system, modernise the payment system, prepare the Law on Digital Assets and create a national fintech sandbox.

Minister Damjanović referred to the latest macroeconomic and fiscal indicators, and growth trends the Montenegrin economy recorded in the first half of the year and plans for future cooperation with the World Bank. He introduced Vice President Bassani to the recently adopted budget rebalancing, which, as he pointed out, represented the verification of the Ministry of Finance and the Government team efforts through careful and conservative fiscal policy planning and implementation to strengthen the budget revenue side and project a deficit within the allowed Maastricht criteria, and gradually reduces public debt and the need for borrowing.

Discussing intensive and successful cooperation with the World Bank, the interlocutors also referred to the preparatory activities for contracting the World Bank's Development Policy Loan (DPL), which contains a reform measures agenda in strengthening macroeconomic stability and fiscal resilience and raising environmental business standards. In this context, they jointly assessed the mostly fulfilled preconditions of the arrangement under the Ministry of Finance authority, which is also expected from other institutions involved in the process.

On the meeting sidelines, Governor Žugić met with Klaas Knot, De Nederlandsche Bank President. At the meeting, they confirmed the very successful long-term cooperation of the two banks, especially concerning capacity building in supervision, prevention of money laundering, internal audit and vault operations. Governor Žugić pointed out that Montenegro continuously improved the institutional framework and adapted it to the highest European central banking standards through these and other cooperation modalities with the DNB.

Central Bank of Montenegro

Ministry of Finance

Public link

Please use the above public link if you want to share this noodl on another website.