After the latest €750m borrowing in December last year (plus €140m of interest rate), Montenegro’s public debt most likely exceeded the value of the gross domestic product, GDP. Analysts point out that the increase in public debt to the amount of the GDP or above it means that we spend a lot more money than we make, and if it lasts for too long, things are going to be catastrophic. According to them, adverse effects of public debt on the economic activity may be expected, reports Pobjeda daily.
Analysts also say that we can decrease the public debt with increased economic activity, that is, the creation of new values and decrease in public spending, strengthening of the real sector, faster growth of the economy and boosting the economy’s competitiveness.
The Minister of Finance and Social Welfare, Mr Milojko Spajić, stated earlier this week that the new government, at the time of its formation, had found a share of the GDP debt amounting to 88.6%, while the gross public debt after the borrowing increased by around 104% of the GDP. According to the Minister, it’s estimated that net debt would be around 85% this year.
