The latest government’s borrowing at an interest rate of cumulatively over 10% makes the public wonder about the moment when Montenegro won’t be able to request the emergency bailouts anymore. The fact is that we’re going to lack money more and more because of the bad state of public finances, which is why Montenegro has no credibility on the international market. Due to the lack of reforms, aggressive political recruitment and populist measures, the government’s projections are that in 2024 the planned debt will amount to €842 million, and even €1 billion in 2025 and another €1.127 billion to cover the missing funds. These are the data from the 2023-2025 Proposal for the Program of Economic Reforms.
According to the state budget, we’re going to lack another €500 million this year. Therefore, over €2.5 billion for this and the next two years.
Recall, from 2006 (when it regained its independence) to 2020, if we don’t count the secret borrowing of €750 million, Montenegro borrowed around €3 billion and it was for the capital projects, such as the highway, undersea cable to Italy, construction of kindergartens, schools, healthcare institutions… Therefore, it had borrowed €3 billion for 14 years, while from 2020 to 2025, it borrowed over €3.5 billion just to be able to cover their populist decisions.
However, Montenegro won’t be able to request bailouts for too long, maybe only until the end of this fiscal year, as the current way of running the fiscal policy lacks reforms and the governments is borrowing money just to be able to fund their populist promises.
