Podgorica, (MINA-BUSINESS) – According to Government ‘s projections, public debt will rise to nearly €6 billion by the end of 2028, which is €1.2 billion or 25 percent more than today, said Social Democrats (SD) MP and representative of the European Alliance Boris Mugosa.
He stated that the greatest burden for the state will come in 2027, when the “secretly and systematically” arranged borrowing of €750 million from the end of 2020 becomes due.
Mugosa said that part of the public debt must be repaid from current revenues, not only through new borrowing, because future governments will also have to repay the enormous debts of their predecessors, which from 2020 until now amounted to more than €2 billion.
He added that significant borrowing is expected in the coming years as well.
Mugosa warned against superficial and politically driven interpretations of public debt in the context of its percentage share of gross domestic product (GDP).
He believes that the structure of Montenegro’s GDP should be examined, as it is predominantly driven by consumption, while a very concerning foreign trade deficit persists.
Mugosa recalled that last year the coverage of imports by exports was the lowest in the past 15 years and that Montenegro recorded its largest foreign trade deficit of approximately €3.5 billion in that period.
He added that the trends are even worse this year.
“Micro-enterprises, which form the backbone of the economy as they account for 93 percent of all companies and employ approximately 39 percent of the workforce, have been making losses for the past six years, while their capital today is a quarter lower than in 2019,” Mugosa said.
He noted that the new European Commission report confirms the need to limit public spending, sustainably increase public revenues, adhere to fiscal rules while reassessing the current fiscal policy, and prepare a comprehensive analysis of fiscal risks.
“Insisting on economic policies based on administratively and pre-election-driven increases in spending, without essential streamlining of unproductive expenditures, and on massive borrowing does not lead to the stability and sustainability of the financial system,” Mugoša concluded.
