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Draft budget for 2018 aims to boost competitiveness, economic development, more balanced regional development

Draft budget for 2018 aims to boost competitiveness, economic development, more balanced regional development
Published date 14.11.2017 12:10 | Author PR Service

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PR ServicePodgorica, Montenegro (14 November 2017) -- "We passed the budget for the next year after the first year of conducting financial consolidation and achieved encouraging results in improving stability of the financial sector, and a significant growth of our economy," Deputy Prime Minister for Economic Policy and Financial System Milutin Simović told today's press conference presenting the 2018 Draft Budget Law.

In DPM Simović's words, today's press conference is organised in this format with a view to improving the principle of openness, especially regarding the most important financial document for all the citizens.

"Encouraged by the achieved, we are determined to continue with dynamic and sustainable economic growth, develop the vision of progress of the entire society and boost the quality of life of our citizens. The economic growth, which is at the highest rate in the region and among the highest in Europe, is an incentive, but also a task and a challenge for the next budgetary year," noted the Deputy Prime Minister.

All government departments will be obliged to provide new value and contribute to stronger economic growth based on major investment projects in the sectors of transport, tourism and energy, accelerated implementation of started projects and creation of conditions for rapid start of the new ones.

"The economic development we aspire to means diversification of the economy, changing its structure, opening up new companies, increasing employment, increasing competitiveness based on greater innovation and strengthening export opportunities. Our important goal and a growing need is to develop human resources, upgrade education, establish and promote the knowledge society, entrepreneurship development, support for innovations and new technologies," DPM Simović explained, adding that it is necessary to continue with the consistent implementation of fiscal consolidation measures and to intensify the process of European integration.

Deputy Prime Minister Simović outlined the key goals of the 2018 Draft Budget Law:

- Strengthening stability of public finance,
- Increasing competitiveness and economic development,
- Continuing major capital investments,
- Guaranteeing social and welfare security of citizens,
- Regular financing of public activities,
- More balanced regional development,
- Improving public infrastructure,
- Regular servicing of international obligations.

PR ServiceKey indicators of the budget in the function of strengthening stability of public finance are as follows: growth in the source revenues, which, according to the reports for the next year, will be higher by EUR 153.6 million, or 9.9%; projected reduction of the budget deficit to EUR 116.2 million or 2.6%, meaning impairment of EUR 117.5 million, or 50%, compared to the planned reduction for 2017. Furthermore, there will be less need for borrowing (158.3 million or 35% less), thus creating conditions for reducing public debt in the medium term.

The draft budget also envisages an improved control of spending, a reduction in the budget deficit, a lower need for borrowing, borrowing solely for the purposes of development and refinancing of debt. All other budgetary spending will be financed from the country's original income, the Deputy Prime Minister underscored.

He also pointed out that the draft budget guarantees the citizens' social and security welfare and regular servicing of all public functions, that is, regularity of payments of all types of social and  welfare benefits, regularity of pension payments, ensuring their growth, preservation of the existing level of salaries of employees in the public sector. In order to further contribute to the promotion of exceptional values and results in areas of particular importance for the society, such as education and health, the Government has provided a special fund for rewards to employees in these areas.

With the aim of pursuing the Government's policies, particular attention will be paid to the employment system, entrepreneurship development, agriculture and rural development, tourism, judiciary, the Prosecutor's Office and the Ministry of Justice.

The budget also strongly supports the "knowledge society" and the development of entrepreneurship, through greater support for education - by increasing the budget for education and the budget of the University of Montenegro, at the same time providing significantly more support for the development of science.

The budget envisages an even stronger support for healthcare, amounting to EUR 205.3 million, which is EUR 8.7 million or 4.4% more, with the aim of improving procurement of medicines and medical devices, material costs, treatment outside the public health system, etc.

PR ServiceGiven the experience from this and previous years and in order to respond more effectively to the consequences of natural disasters (fire, floods, etc.), the Ministry of Defence plans to purchase 3 multipurpose helicopters totalling EUR 30 million with a repayment period of 5 years, and the Interior Ministry plans to purchase two firefighters with a total value of 6 million euros, with a repayment period of 3 years.

The budget aims to increase competitiveness, economic development and more balanced regional development.

The 2018 capital budget foresees the financing of projects worth EUR 287.7 million, through:

- Continuation of the project of the Bar-Boljare motorway construction (EUR 210 million planned in 2018).
- Continuation of the existing and inclusion of new projects implemented through the Directorate for Transport (EUR 35.1 million) and the Directorate of Public Works (EUR 42.6 million).

The largest part of these allocations refers to the northern region. Furthermore, increased funds have been provided to continue the reconstruction and maintenance of the railway infrastructure.

"We expect these components of the budget to give maximum contribution to strengthening macroeconomic stability, further economic growth, new job creation and further improvement of the standard of living of our citizens," the Deputy Prime Minister concluded.