Montenegro’s credit rating will be increased this year since the government has adopted the fiscal strategy and austerity measures twice, and the country has joined NATO, Pobjeda unofficially learns.
This, as expected, should be reflected in the cheaper government borrowing on international financial markets, and reduce the interest rate by at least 1%.
Pobjeda recalls that both the Standard and Poor’s and Moody credit agencies lowered Montenegro’s rating last year. Moody lowered its rating from Ba3 to B1 as it explained due to the increased fiscal risk connected to the Bar-Boljare highway construction project.
Commenting in the possible increase in credit rating, the Ministry of Finance clarified that political context and stability of a country were very important factors for the rating, in addition to fiscal parameters and the general economic situation.
“The last successful step in a foreign policy of Montenegro – membership in the NATO alliance, will contribute to the long-term enhancement of credit rating,” the ministry said.
Vice president for economic policy Milutin Simovic confirmed last week that the government seriously count on increasing credit ratings.
“With the projection that interest rates will fall by 1.5%, it will mean a saving of €30m annually. For five years, as usually calculated, that would be €150m,” said Simovic.
Finance minister Darko Radunovic was optimistic when it comes to rating. He recalled that the public debt to foreign creditors amounted just over €2bn.
He added that if these consolidation measures lead to 1% lower interest rate at which Montenegro borrows, it would make enough savings to ensure the development.
“Saving on that basis would be significantly higher than savings through measures that we are currently conducting,” Radunovic said.
