NewsMontenegro's economy grew by 6% last year - Growth in bank capital,...

Montenegro’s economy grew by 6% last year – Growth in bank capital, deposits, and loans also recorded

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It is estimated that the real growth of Montenegro’s economy in 2023 will amount to 6%, as assessed at the meeting of the Financial Stability Council. As announced, there was a slowdown in inflation last year, with the annual rate in December at 4.3%, while the average inflation rate in 2023 stood at 8.6%.

  • On an aggregate level, the financial sector continued to show positive trends in 2023. On an annual basis, bank capital increased by 22%, deposits by 4.8%, and loans by 11.9%. The share of non-performing loans and receivables in total loans at the end of 2023 was 5%, which is 0.04 percentage points less than at the end of the third quarter of 2023, or 0.7 percentage points less than at the end of 2022 – data from the Financial Stability Report discussed at the meeting.

Considering the observed parameters, the Council assessed the systemic risk to financial stability as moderate and emphasized the need for continued careful monitoring of indicators of financial system stability, particularly considering that the Montenegrin economy is still affected by global geopolitical uncertainties.

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The meeting expressed full commitment of the Council members to the process of Montenegro’s accession to the Single Euro Payments Area (SEPA) system. In this regard, the Central Bank of Montenegro (CBCG) and relevant ministries are undertaking intensive activities to prepare the application for SEPA membership, which will be submitted to the European Payments Council in the coming period.

  • Accession to the SEPA system would represent one of the clearest signals of our country’s concrete approximation to the European Union, with numerous benefits for citizens and the economy in terms of simplifying processes, improving transaction speed, and reducing transaction costs – concluded the meeting.

The meeting of the Financial Stability Council, chaired by Dr. Irena Radović, Governor of the Central Bank and Chairperson of the Council, was attended by members Novica Vuković, Minister of Finance, Željko Drinčić, President of the Capital Market Commission, and Marko Ivanović, President of the Insurance Supervision Agency Council. At the invitation of the Governor, the Director of the Deposit Protection Fund, Vojin Vlahović, also attended the meeting.

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