On behalf of the Montenegrin authorities, we would like to thank staff, led by Mr. Seshadri, for their productive engagement during the Article IV mission and express our appreciation for the constructive policy findings and recommendations reflected in their report. The authorities broadly agree with staff’s appraisal.
The authorities have continued implementing the fiscal consolidation measures as well as the Medium-Term Debt Management Strategy (MTDMS), which should put the debt on a steady downward path and reduce the refinancing risks, as recognized in the report. The banking system is very liquid, well-capitalized, and adequately profitable, despite the recent challenges associated with two small banks. At the same time, the authorities are progressing with the improvements in the AML/CFT framework, implementation of the remaining 2016 FSAP recommendations as well as following up on recent technical assistance recommendations. In parallel with ensuring long-term macro-financial sustainability, the authorities continued with the implementation of their Economic Reform Program (ERP) for 2019–2021. These combined efforts should warrant stable economic growth after the end of the first phase of the highway project while smoothing the negative effects of a possible global slowdown and worsening of global financial markets conditions.