Clarification by the Ministry in regards to recent press coverage of Chinese loan
In order to clarify speculations arising in regards to the recent press coverage on $1bn Chinese highway loan, Ministry of Finance and Social Welfare wishes to reiterate that public finances of State of Montenegro are in a sustainable shape and fully aligned with the convergence Maastricht criteria with respect to 3% deficit limit. As of April 15 2021, revenues and expenses are fully in line with this year’s proposed budget that presumes 2.98% fiscal deficit for this year - a steep reduction from 10%+ from the last year, reflecting the government’s efforts to reach the fiscal targets sooner that rating agencies deemed reachable only in 2023/2024. We have also decreased our gross debt/GDP ratio from 105% as of Dec 2020 to 97% currently, as well as net debt/GDP ratio from 89% in Dec 2020 to 85% as of April 2021.
It is important to emphasize that the Government of Montenegro has never asked any other institution to take over and repay the debts of the sovereign – this is an unfortunate misunderstanding caused by inaccurate interpretations. Instead, we were looking to commence negotiations with our European partners regarding potential refinancing of strategically important infrastructure projects throughout the country, including the highway. The recent statement by European officials confirmed that the EU support our European path and that we are exploring options to find workable solutions for our investment projects and ensure sustainability of our economy.
Current Ministry of Finance and Social Welfare would always emphasize the importance of dialogue with our partners within the EU at the first instance, as well as reputable financial institutions worldwide in order to identify the most viable financing solutions. Our priority is that the public finances of Montenegro reach an exemplary state for a continuous period of time with a mission to become the strong next EU entry.