The Government of Montenegro has determined the proposal for the 2022 budget law, the proposal for the 2022 government borrowing, as well as the proposal for the 2021-2024 fiscal strategy.
The proposed fiscal strategy for the period 2021-2024 foresees that “it’s necessary to conduct a restrictive fiscal policy in a mid-term period”. However, by analyzing the measures of fiscal policy, mid-term projections and the 2022 budget, it’s clear that it’s going to be everything but restrictive.
Projections not aligned with measures
Secondly, the mid-term projection in the fiscal strategy is not aligned with the measures outlined in it. Even though a range of measures from the ‘Europe Now’ project are included in the strategy, the projected revenues will decrease from 39% of GDP to 36% of GDP in 2024.
On the other hand, the strategy says there will be a decrease in public expenditure to 36% of GDP in 2024 following a 41% GDP in 2022, but no word is said about how it’s going to happen.
The strategy also doesn’t include clear fiscal results of these measures by year, except for 2022 and a part of 2023.
Economic growth envisaged but with no further details
Thirdly, the Strategy envisages an economic upswing of 6.4% and 5.1% in 2022 and 2023, which is a lot more compared to the projections of international organizations, such as the IMF and the World Bank.
