The banking sector in Montenegro during 2017 was characterized by high liquidity and a declining credit risk. The insurance market is stable, while the capital market is still recording a moderate recovery. Fiscal risks continue to be pronounced, but due to the implementation of fiscal consolidation measures, their intensity and direction of influence on financial stability have been reduced, from a rising to a moderate level, said the Financial Stability Council of the Central Bank of Montenegro.
“On the basis of these estimates, the systemic risk of financial stability has been judged to be moderately stable, with the presence of certain real sector risks that continue to influence the increase in pressures in the fiscal sphere, as well as the risk of insufficient income of the economy and population that slow down the recovery dynamics”, the Council said after a recent session.
As for the domestic macroeconomic environment, during the first quarter of the current year, positive trends in industrial production (growth of 39%) and retail trade (growth of 4.9%), as well as in the construction and tourism sectors, were recorded. Namely, the number of tourist arrivals in the first three months of 2018 increased by 28.7 percent compared to the same period last year, while the value of construction works increased by 46.8 percent.
Positive trends in certain fiscal indicators have also been recorded, so the original budget revenues for the first three months of 2018 are 10% higher than the same period last year.
Discussing the current issue of trade in virtual currencies, Council members concluded that these novelty currencies are characterized by high volatility and unpredictability, and that citizens need to be very cautious about investing in them. It was emphasized that transactions with these “cryptocurrencies” are not covered by Montenegro’s regulatory framework, nor controlled by it, meaning that any and all risks are assumed by individual investors.
