April 22 (SeeNews) - Montenegro’s fiscal position is expected to worsen significantly as a result of the coronavirus crisis, threatening the debt refinancing plans of the government, EU enlargement commissioner Oliver Varhelyi said.
"Until recently, the country’s debt refinancing risks appeared low, as favourable market conditions in 2019 were used by the government to secure deposits to cover the country’s financing needs for the next two years. However, Montenegro’s fiscal position is expected to substantially deteriorate due to the impact of the coronavirus crisis," Varhelyi said in a written answer to a EU Parliamentary question earlier this week.
Montenegro projects a decrease of public expenditure as of 2021, accompanied by budget surpluses, in large part reflecting the completion of the China-funded first section of the Bar-Boljare motorway in 2020, Varhelyi said.
"In this baseline scenario, the public debt-to-Gross Domestic Product (GDP) ratio would decline rapidly in the next two years, to reach 62.5% of GDP at the end of 2022," the commissioner said.
Earlier this month, Montenegro's economy minister Dragica Sekulic said the government considers proposing a revision of the 2020 state budget in May, as revenues will fall short of plan due to the coronavirus crisis.
"We will not have budget revenues the way we have had them in previous months and previous years. So, we will rely on lower budget revenues, there is already a certain minus accumulating," Sekulic said.
Montenegro's 2020 budget targets a deficit of 50 million euro ($54.3 million), equivalent to 0.99% of the projected gross domestic product (GDP), based on revenues of 1.988 billion euro, expenses of 2.038 billion euro and economic growth of 3.4%.
($ = 0.920276 euro)