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Preliminary Conclusion of IMF mision

1. Montenegro has made significant progress in overhauling its economy. The last five years have seen inflation performance improved through the adoption of the euro as sole legal tender; banking sector restructuring; significant privatization; strengthened market infrastructure; and progress in fiscal consolidation. These efforts have been rewarded by strong foreign investor interest, particularly in tourism, construction, and banking. Credit growth has soared, stimulated by surging deposits and keen competition in the largely foreign owned banking sector. Demand has boomed, supported by credit, increased wealth from real estate sales to foreign investors, and expectations of continued strong economic growth. As a result, GDP, employment and wages have grown strongly, while the registered unemployment rate has halved from 20 percent in 2005 to under 11 percent recently..


Membership of the Republic of Montenegro in International Financial Organizations

The renewed statehood and independence marked a new beginning for the Republic of Montenegro. This, at the same time, implies inherited obligations. By the Resolution on Proclaiming the Independence of the Republic of Montenegro (Official Gazette of the Republic of Montenegro No. 36/06) adopted on the session of the Assembly of the Republic of Montenegro as of June 3rd 2006, it was, apart from other things, determined that the Republic of Montenegro with its full, international legal status, would apply and take over international contracts and agreements which had been concluded and which were entered by the State Community Serbia and Montenegro and which concern Montenegro and are in accordance with the current legal system...


World Bank News: Montenegro Joins The IMF And World Bank

Montenegro has joined the International Monetary Fund (IMF) and the World Bank, boosting each institution's total membership to 185 countries. /


Concluding Statement of the Mission IMF

1.Independence marks a new start for Montenegro. In that context, our aim is to offer suggestions on how to make best use in the macroeconomic area of this unique opportunity... Download


Serbia and Montenegro: Sixth Review Under the Extended Arrangement, Financing Assurances Review, Request for Waivers of Nonobservance of Performance Criteria,and Proposed Post-Program MonitoringStaff Report; Press Release on the Executive

In Montenegro, continued tight macroeconomic policies are required to improve
competitiveness under the euroized monetary regime, and ensure sustainable growth.
Structural reforms will be of paramount importance to increase domestic output and reduce external imbalances. Wage pressures beyond productivity growth in the run-up to elections next year remain a concern and should be resisted...



Upon establishing of the State Union Serbia and Montenegro (by adoption of the Constitutional Charter on February 4, 2003), the new state became a legal successor of the FRY and internationally recognized entity. Governments of the Republic of Montenegro and Republic of Serbia concluded in April 2003 an Agreement on Representation of the State Union Serbia and Montenegro to the International Financial Institutions. According to the Agreement, the Central Bank of Montenegro is a fiscal agent of the State Union of Serbia and Montenegro to the World Bank, while National Bank of Serbia is assigned the same task to the International Monetary FundDownload


Serbia and Montenegro: 2005 Article IV Consultation - Staff Report; Fifth Review Under the Extended Arrangement, Financing Assurances Review, and Request for Waiver of Nonobservance of Performance Criteria and Rephasing of Purchases -

In Montenegro, fiscal deficit will be reduced by about 1 percent of GDP to reach 2.7 percent of GDP in 2005 to contain demand and the external balance. To achieve this target, transfers and other outlays will be cut relative to the budget, reduction of public employment will be stepped up, and no further tax cuts will be granted. The large expected privatization proceeds (10 percent of Montenegrin GDP) will be used mainly to retire domestic debt. Staff urged the authorities to resist spending pressures and to postpone the large planned infrastructure projects to avoid destabilizing macroeconomic balances. Instead, the authorities should strengthen revenue collection, accelerate civil service reform, and improve debt and asset management to create room for additional investment...Download


Serbia and Montenegro: Fourth Review Under the Extended Arrangement, Financing Assurances Review, and Request for Waiver of Performance Criteria and Modification of End - December Performance Criterion - Staff Report; Staff Statement;

Fiscal adjustment continues in Montenegro. The 2004 general government deficit (before grants and foreign loan - financed projects, FLFPs) is targeted at 36.1 million, or 2.4 percent of Montenegrin GDP. In 2005, the fiscal deficit (before grants and FLFPs) will fall to 25.8 million, or 1.6 percent of Montenegrin GDP. Government approval and public announcement of the additional 2004 cuts and submission to the Parliament of the draft budget for 2005 in line with this MEFP will be prior actions for Board considerations of the fourth review. Over the medium term, government is commited to continue lowering the deficit to ensure fiscal and external sustainability... Download


Serbia and Montenegro: Third Review Under the Extended Arrangement and Requests for Waiver of Performance Criterion and Rephasing of Purchases - Staff Report; Staff Supplement; Press Release on the Executive Board Discussion; and Statement

In Montenegro, agreement was reached on a tax reform plan and measures to ensure achievement of the 2004 deficit.The tax reform entails lower social contribution and PIT rates of 10 percent by end - 2004 (implemented in July and December in two 5 percent steps). Together with projected shortfalls in Revenue and External financing, a 2004 fiscal gap of about 1 percent of Montenegrin GDP emerged. A Supplemental Budget (a prior action) is to close this gap with revenue and expenditure measures of 0.3 and 0.7 percent of GDP, respectively...Download


Serbia and Montenegro: Second Review Under the Extended Arrangement and Requests for Waiver and Modification of Performance Criteria, and for Extension of Repurchase Expectations - Staff Report; Staff Statement; Press Release on the

Montenegro's revised fiscal plan involves
expenditure cuts to ensure achievement of the deficit target of 5.6. percent of Montenegro's GDP (0.4 percent of SM's GDP).Revenue appears to have recovered after a weak performance in 2003 Q1 - attributed to temporary problems in tax administration - but is still projected to register a shortfall of 0.9 percent of GDP in 2003.Expenditure cuts affect mainly social transfers, subsidies, and investment, and also involve wage restraint and around 3.500 retrenchments, primarily from the overstaffed Interior Ministry and the education sector...Download