Page 145 - SE Outlook Regions 2023

The World Bank has projected Montenegro’s fiscal balance at 4% of
GDP in 2023 and 2.7% of GDP in 2024, due to higher social and capital
spending.

Montenegro’s budget deficit fell by 6.5% year on year to €56mn in the
first ten months of the year. The period was marked by good collection
of revenues, which were significantly above the plan, while almost all
categories of expenditures were lower than planned.

The main driver of the rising revenues was the income from VAT that
went up by 34.5% y/y thanks to increasing household spending, higher
imports and inflation but also the successful summer tourist season.

The deficit was equal to 1% of GDP in the first ten months.

Budget revenues in the first ten months totalled €1.63bn, or 28.6% of
the estimated GDP, and were higher by 8.2% compared to the same
period in 2021.

Budget expenditures amounted to €1.68bn or 29.5% of the estimated
GDP and were higher by 7.6% y/y.

Meanwhile, the World Bank has projected that Montenegro’s public
debt will stay high at around 72% of GDP in 2023 and 2024.

“Given the tightening of global financial conditions and Montenegro’s
sizable financing needs of around 9 percent of GDP in 2023,
Montenegro will require very careful debt management and stronger
control over its expenditures,” the World Bank noted.

Montenegro’s public debt stood at €3.66bn at the end of June, equalling
69% of the projected full-year GDP forecast. The foreign debt was
€3.63bn, down from €3.69bn at end-December 2021. China’s Exim
Bank, which has lent the country most of the funds needed for the
Smokovac-Matesevo highway, remained the largest creditor at the end
of June with the debt totalling €722.1mn. Montenegro has asked the EU
for help to repay the debt.

The debt to the International Bank for Reconstruction and Development
(IBRD) totalled €184.71mn. The debt to the European Investment Bank
stood at €97.1mn.

The country also has Eurobonds worth €1.75bn.

Montenegro’s internal debt stood at €382.5mn, down from €401.54mn
at end-2021.

4.8 Budget and debt - North Macedonia

North Macedonia adopted the draft budget for 2023 with a deficit of
MKD42.7bn (€693mn) or 4.6% of the country’s GDP that will be slashed
to 3% of GDP in the medium-term, according to Ministry of Finance
data.

145 SE Outlook 2023 www.intellinews.com