Montenegro Public Finance Synthesis Report
Benefiting from successful economic transformation after independence and the start of EU accession negotiations, economic activity in Montenegro has been solid, supporting the rise in incomes their convergence with the ones in the European Union. Inflation has been modest and kept in check. However, the import dependence of the growth model and the excessive reliance on the state to stimulate the economy have contributed to widening of external and internalimbalances as well as indebtedness. There have been recent efforts at fiscal tightening, but more needs to be done to address structural rigidities and boost the commitment to the objectives of economic policies. This is particularly the case with respect to the medium-term budget plans, public sector restructuring, pension and health reforms, improvements of market competition, and the labor market. Montenegro confronts today the need for further fiscal adjustment to turn the deficit into surplus and bring public debt below the Maastricht level. This would help creating the fiscal space for strengthening its convergence prospects with the EU and with the alignment with the rules in the eurozone, given the country’s use of euro as the local currency. Fiscal and structural policies in an economy without monetary policy levers are of paramount importance to protect stability and competitiveness. This Public Finance Synthesis Report is a summary of policy discussions over the last few years carried out under the various World Bank activities, including the Policy-Based Guarantee, the analytical work under the topic of Jobs and Growth and on pharmaceutical reform issues). While the Government has already taken major efforts to address some of the critical bottlenecks in the economy, this synthesis report summarizes and outlines pathways to further strengthen the sustainability, efficiency, and effectiveness of public finances in Montenegro.
| Main Author: | |
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| Format: | Report biblioteca |
| Language: | English |
| Published: |
World Bank, Washington, DC
2019-05-31
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| Subjects: | FISCAL TRENDS, SPENDING EFFICIENCY, LOCAL GOVERNMENT FINANCES, SOCIAL BENEFITS, PENSION SYSTEM, HEALTH SYSTEM, REVENUE MOBILIZATION, TAX ADMINISTRATION, PUBLIC FINANCIAL MANAGEMENT, PUBLIC INVESTMENT MANAGEMENT, PUBLIC EXPENDITURE, |
| Online Access: | http://documents.worldbank.org/curated/en/108101559640817785/Montenegro-Public-Finance-Synthesis-Report-Restoring-Sustainability-and-Strengthening-Efficiency-of-Public-Finance https://hdl.handle.net/10986/31840 |
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| Summary: | Benefiting from successful economic
transformation after independence and the start of EU
accession negotiations, economic activity in Montenegro has
been solid, supporting the rise in incomes their convergence
with the ones in the European Union. Inflation has been
modest and kept in check. However, the import dependence of
the growth model and the excessive reliance on the state to
stimulate the economy have contributed to widening of
external and internalimbalances as well as indebtedness.
There have been recent efforts at fiscal tightening, but
more needs to be done to address structural rigidities and
boost the commitment to the objectives of economic policies.
This is particularly the case with respect to the
medium-term budget plans, public sector restructuring,
pension and health reforms, improvements of market
competition, and the labor market. Montenegro confronts
today the need for further fiscal adjustment to turn the
deficit into surplus and bring public debt below the
Maastricht level. This would help creating the fiscal space
for strengthening its convergence prospects with the EU and
with the alignment with the rules in the eurozone, given the
country’s use of euro as the local currency. Fiscal and
structural policies in an economy without monetary policy
levers are of paramount importance to protect stability and
competitiveness. This Public Finance Synthesis Report is a
summary of policy discussions over the last few years
carried out under the various World Bank activities,
including the Policy-Based Guarantee, the analytical work
under the topic of Jobs and Growth and on pharmaceutical
reform issues). While the Government has already taken major
efforts to address some of the critical bottlenecks in the
economy, this synthesis report summarizes and outlines
pathways to further strengthen the sustainability,
efficiency, and effectiveness of public finances in Montenegro. |
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