PODGORICA (Montenegro), November 16 (SeeNews) – The Montenegrin government has approved the budget bill for 2016, targeting a deficit of 276.6 million euro ($297 million), equivalent to 7.15% of the country's projected gross domestic product (GDP), the finance ministry said.
Budget revenues are projected at 1.5 billion euro next year with expenditures set at 1.7 billion euro, the text of the bill showed.
Montenegro's current public debt is equivalent to 59.6% of GDP and is projected to increase to 64% by the end of 2015 and to 68.5% by end-2016 due to a key capital spending project, the construction of the Bar-Boljare motorway, the finance ministry said on its website on Saturday.
Although these public debt targets will take the country beyond the advisable limits, that should be offset by high economic growth rates, the ministry said.
The government will borrow up to 205 million euro from China's Ex-Im Bank in 2016 for the construction of the Smokovac-Uvac-Matesevo section of the Bar-Boljare motorway and plans to fund the remainder of the works with up to 50 million euro which it will secure through bond issues and credit arrangements with local and foreign institutions, the documents show.
The draft budget is pending parliamentary approval.
In the first eight months of 2015 Montenegro’s budget revenues rose 2.2% to 839.8 million euro, the finance ministry indicated earlier.
The 169 km Bar-Boljare motorway will be part of the longer Bar-Belgrade stretch of pan-European Transport Corridor X, which will link Montenegro's Adriatic coast with the Serbian capital.
($=0.93 euro)