Page 144 - SE Outlook Regions 2023

In the first eleven months of 2022, for instance, the general government
budget deficit in Moldova was only MDL5.2bn, or 1.9% of GDP.

4.7 Budget and debt - Montenegro

Montenegro’s government has adopted the budget for 2023, projecting
the deficit at 5.9% of GDP, or €366mn. The plan is yet to be approved
by the parliament. The budget revenue is seen at €2.852bn, up by
€165mn from 2022. The economic growth is projected at 4%.

“For the first time, the budget envisages an increase of wages in the
public administration, in education and the police. An addition for all
children aged below 18 is being introduced and there will also be funds
for a financial supplement for each newborn child,” Prime Minister
Dritan Abazovic said while introducing the budget draft.

He added that the capital spending for projects other than the
construction of the second section of the Bar-Boljare motorway would
be more than €200mn, while the subsidies for agriculture will be
increased.

Budget spending is planned at €2.852bn, up by €165.6mn from 2022.

The transfers for social protection are planned at €785mn, while €35mn
will go for pension hikes. The government plans to increase the minimal
pension to 60% of the minimum wage in 2023.

Healthcare costs are planned at €402mn. The government also plans to
spend 2% of GDP on defence.

In 2023, Montenegro plans to borrow €600mn to finance its budget
deficit and debt repayment.

However, the 2023 budget plan was strongly criticised by former
finance minister Milojko Spajic, the leader of the Europe Now party, who
said the plan is unsustainable and threatens fiscal stability as it
envisages high borrowing.

“The budget is unsustainable and I would not recommend it to the state,
nor to a foreign state. The current spending is higher than the current
revenue and we are returning to the times of budgets [drafted] by
[former ruling Democratic Party of Socialists] DPS when we were
borrowing €500mn [per year] or so,” Spajic said in late 2022.

He added that the intention of the government to increase the income
was positive but it is happening without the necessary accompanying
reforms.

Moreover, the revision of the 2022 budget has added €200mn spending
without additional revenue, which will result in more debt next year.
Spajic claimed that by 2025 the annual borrowing could increase to
€1bn at that pace.

144 SE Outlook 2023 www.intellinews.com