January 12 (SeeNews) - The Montenegrin government said it targets average annual economic growth of 3.2% from 2024 to 2026, mainly driven by domestic demand.
Domestic demand will be fueled by robust household consumption and the start of a new investment cycle, which will be prompted by regulatory reforms and the reduction of business barriers, the government said in a statement on Thursday.
The gross domestic product (GDP) growth target is based on the preliminary macroeconomic projections of the government's 2024-2026 economic reform programme, according to the statement.
As part of the programme, the government also plans to reduce the budget deficit to below 3%/GDP in 2026. In addition, it wants to achieve a surplus in current budgetary expenditure, which means financing all current obligations from current revenues.
The government sees the public debt at some 62% of GDP in 2024 and projects a downward trend in 2025-2026.
In order to achieve this, the government will ensure that new borrowing is solely for financing capital projects or repayment and refinancing of existing state debt. State guarantees will be issued only for projects of common public interest that support the long-term development of the country.
Earlier this week, the World Bank adjusted its two-year forecast for Montenegro’s GDP growth by lifting it by 0.1 percentage points to by 3.2% for this year, and by 0.2 percentage points to 3.1% for 2025. It estimates that the Montenegrin economy expanded 4.8% in 2023.
In December, Montenegro approved its 2024 state budget with a projected deficit of 3.1% of GDP.
In November, the parliament in Podgorica approved a 2023 budget revision, lowering the expected deficit to 3.4% of GDP, from the previously planned 5.9% of GDP.
The country's statistical office is expected to release GDP growth data for the final quarter of 2023 in March. Latest available figures show that the domestic economy increased by a real 6.6% on the year in the third quarter of last year, following annual growth of 6.9% in the previous quarter.