NewsAnnual IMF Consultations Underway

Annual IMF Consultations Underway

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The Governor of the Central Bank of Montenegro (CBCG), Irena Radović, held an introductory meeting today with the delegation of the International Monetary Fund (IMF), led by the Head of the IMF Mission for Montenegro, Srikant Seshadri.

According to the CBCG, the IMF team is in Montenegro for the regular annual consultations under Article IV of the IMF’s statute.

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This is a regular IMF mission that collects current information about the state of the economy, prospects, and policies in a member country at least once a year.

Presenting key trends characterizing the macroeconomic environment in Montenegro to the IMF representatives, Radović highlighted that, according to CBCG projections, the growth of the Montenegrin economy in the previous year amounted to 5.7%, with the largest contribution coming from the increase in private consumption, driven, among other factors, by the influx of a large number of non-residents and a growth in wages in the country.

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“Positive trends in the previous year were recorded in the tourism, industrial production, and retail trade sectors, while, according to data for the first nine months of last year, the construction sector experienced a decline,” the statement says.

Radović stated that the banking sector remained stable, liquid, adequately capitalized, and profitable last year.

She added that key balance sheet positions – bank assets, loans, deposits, and capital – recorded growth compared to the year 2022.

“Non-performing loans at the end of December last year constituted 4.99% of total loans, which is 0.72 percentage points lower than in 2022,” Radović noted.

According to her, the focus of the CBCG’s work in the coming period will be on further aligning national regulations with the European Union and implementing international standards to preserve the country’s financial stability, as well as further strengthening the independence of the Central Bank.

“On this path, we highly appreciate the collaboration with the IMF, through which we will jointly identify and address all possible challenges,” said Radović.

As stated, she thanked the representatives of the IMF for the longstanding assistance that the institution provides to the CBCG through recommendations and technical assistance programs.

Radović also emphasized the commitment to the inclusion of women in positions of economic decision-making, empowering them for equal participation in economic life.

She expressed the expectation that the collaboration between the CBCG and the IMF will enrich in this aspect in the coming period since “reducing the gender gap can undoubtedly contribute to strengthening the economy and improving the quality of life in Montenegro.”

Radović also highlighted that green transition and climate financing are priority directions for the development of the Montenegrin financial sector, and collaboration with the IMF in this segment would be of exceptional benefit to the CBCG.

It is mentioned that Seshadri highlighted that the goal of the upcoming meetings with representatives of the CBCG, the Government, and other institutions will be to assess the economic conditions and the strategic direction of Montenegro’s economic policies in the medium term.

As added, the IMF team thanked the governor and her team for their hospitality, expressing the IMF’s readiness to continue supporting the CBCG and Montenegro in improving the macroeconomic situation and preserving the stability of the financial system.

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