NewsImproving citizen living standards through "Europe Now 2" program hinges on government...

Improving citizen living standards through “Europe Now 2” program hinges on government controlling price increases

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Economic analyst Oleg Filipović has highlighted that the anticipated enhancement in citizens’ living standards from the “Europe Now 2” program will hinge on whether the government can prevent a significant increase in prices.

“If the government manages to keep prices stable, I believe that living standards will improve. However, while prices ideally should not rise based on real economic factors, I anticipate they will, because typically, when salaries increase, so do prices,” Filipović explained to RTCG.

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He further noted that inflation may rise more due to psychological factors rather than economic fundamentals.

“Although the measures may not directly cause an increase in prices or a type of inflation, I expect inflation to rise for psychological reasons, particularly affecting the cost of primary goods. However, the government has indicated that it has strategies in place to manage this by imposing additional price controls,” Filipović said.

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Prime Minister Milojko Spajić announced that under the “Europe Now 2” program, the average salary in Montenegro will soon reach EUR 1,000, with pensions set to increase by EUR 50 to 60 starting in January. The salary increase is scheduled for October 1.

Filipović believes the success of these measures will depend on proper coordination and execution.

“I believe the project is well-coordinated, including the formation of the Development Bank, which aims to gather EUR 300 to 500 million from commercial banks, which are currently being sold at minimal rates of two to three percent. The plan is to secure these funds at a higher rate of four percent,” Filipović said.

He also highlighted that the Prime Minister’s announcement included realistic measures focused on those earning the minimum wage of EUR 450, where the most significant increases are anticipated.

“We have two new minimum wage levels: EUR 600 for high school graduates and EUR 800 for university graduates. Many people working at minimum wage are paid informally, and this move aims to formalize this part of the labor market. I don’t see any major issues with this approach,” Filipović concluded.

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