Montenegro says to borrow EUR 220mn this year, down 12% than planned.

By bne IntelliNews March 22, 2013
Montenegro's government said it decided on Thursday, March 21, to reduce to EUR 220mn from EUR 250mn the amount it plans to borrow this year for financing its budget spending and servicing outstanding debt. The government said in a statement it has adopted the decision after budget revenue rose in the first two months of the year thanks to its measures to consolidate spending and fight grey economy. This year's deficit is planned at EUR 98mn. Finance minister Radoje Zugic told reporters after a cabinet meeting, as quoted by Portalanalitika.me, that the government is in talks with investors who bought its two Eurobond issues, trying to reprogramme the payment and delay its fiscal burden over a longer period of time. Montenegro is struggling to keep its financial stability as the lasting effects of the global crisis resulted in falling revenues and investment, widening fiscal deficit and rising public debt. In February, the IMF warned budget consolidation measures implemented by the Montenegrin government may not be enough to achieve the 2013 deficit target of 2.73% of GDP and curb rising public indebtedness. The country's public debt increased sharply to over 50% of GDP in 2012 since 2008 when it stood at only 29% of GDP. In September 2010 and January 2011, the country placed two Eurobond issues worth a combined EUR 380mn in order to finance rising fiscal imbalances.

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