Total Debt at End of 2024, Including Deposits, Amounted to 55.36% of GDP

AUTHOR: M.J. GDNUS

At its 82nd session held today, chaired by Prime Minister Milojko Spajić, the Government of Montenegro adopted the Draft Law on the Final Budget Account for 2024.

The total public debt (excluding deposits) as of December 31, 2024, amounted to €4,514.80 million, or 60.53% of GDP. Including deposits, the total debt stood at €4,129.44 million, or 55.36% of GDP.

According to the Government, the discussion highlighted a continuous increase in budget revenues during the past year, largely as a reflection of economic activity growth and rising living standards, due to increased disposable income.

"According to preliminary data from the Statistical Office, Montenegro's gross domestic product (GDP) in 2024 is estimated at €7,459.2 million. Current revenues for the year amounted to €2,714.86 million, which is 0.05% below the planned amount and represents 36.4% of GDP. It is important to note that nearly all categories of current revenue grew compared to both the planned figures and the previous year, excluding one-off revenues from 2023," the Government stated.

In the revenue structure, taxes had the largest share—72.5% or €1,968.6 million, followed by contributions with 21.5% or €584.7 million, and other revenues with 3.4% or €92.2 million.

"The remaining portion of current revenues consisted of fees (1.9% or €53.1 million) and charges (0.6% or €16.2 million)," the statement added.

Budget expenditures in 2024 amounted to €3,003.3 million, which is 40.3% of GDP.

"Social benefits made up the largest portion of expenditures (33.6%) and totaled €1,008.2 million, which is 22.2% more than the previous year, primarily due to increased pension and disability insurance payments, especially as a result of higher minimum pensions. Gross wages were the second-largest budget item (22.48%), amounting to €675.2 million, which is 2.8% below the planned figure but 5% higher than the previous year. They were paid in accordance with applicable laws, collective agreements, and actual payroll calculations," the Government reported.

Capital expenditures for 2024 amounted to €299.1 million, which is 16.2% higher than budgeted and 25.3% higher than the previous year, due to increased implementation of capital projects.

"The cash deficit for 2024 amounted to €247.5 million, or 3.3% of GDP. When adjusted for the increase in unpaid obligations from previous years that do not represent loans, the corrected cash deficit is €258.8 million, or 3.5% of GDP," the Government added.

Additionally, €495.6 million of debt was repaid in 2024. When combined with the corrected cash deficit, securities purchases, loans and credits issued, and increased deposits, this created a total funding need of €976.1 million.

"This amount was financed through domestic and international loans and credits (€942.1 million), loan repayments received (€20.3 million), asset sales (€2.3 million), and an increase in net liabilities (€11.3 million)," they explained.

The Government also adopted the Draft Law on the Recovery and Resolution of Investment Firms, along with the public consultation report.

"The adoption of this law enables the implementation of recovery tools and powers set by the amended EU directive, significantly improving the regulatory framework for resolving issues faced by investment firms. To ensure full alignment with the EU legal framework, the draft also includes provisions that will apply after Montenegro joins the EU, further strengthening the system for preventing and resolving problems in investment firms that are part of EU groups. The law outlines mechanisms for protecting investors and creditors, reducing risks to the financial stability of the country, and enabling timely and effective resolution of crises in such firms," the Government stated.

The primary goal of the law is to preserve the stability of Montenegro's financial system by creating a legal framework for resolving insolvency and financial difficulties of investment firms in a way that minimizes negative impacts on the market and the economy.

"The law introduces mechanisms for early intervention and resolution, aiming to preserve the key functions of these firms, protect clients, creditors, and investors, and reduce the fiscal cost to the state. By introducing tools such as resolution plans, internal resolution, and the creation of a Resolution Fund, the law provides a comprehensive framework for preventive measures and effective crisis management," they said.

The Government also adopted a decision establishing the basic and supplementary drug lists.

It adopted a draft for amendments to the Spatial-Urban Plan of the Municipality of Plužine along with the proposal for a public consultation schedule.

“The PUP (Spatial-Urban Plan) of Plužine was adopted in 2012. Following the municipality’s initiative from March 22, 2023, there was a need to designate locations for the construction of solar and wind power plants, define business zones, and adjust the scope of certain local spatial studies. In line with Article 218 of the Law on Spatial Planning and Construction, the Government adopted the decision to draft amendments to the PUP on May 26, 2023. The aim is to establish planning prerequisites for more rational resource use, in line with sustainable spatial planning principles and Montenegro’s strategy to base the development of northern municipalities on tourism and energy. The amendments will apply to the entire municipal area of approximately 854 km²,” the Government noted.

The Government also discussed several personnel matters at today’s session.