In Montenegro, instead of limiting margins, conditions should be created for productivity growth, announced the Chamber of Commerce (PKCG).
The Vice President of the Chamber of Commerce, Nikola Vujović, was today and Wednesday at the session of the Committee for Economy, Finance and Budget in order to present the views of the economy on the set of proposed laws, which are the planned reforms defined by the Draft Fiscal Strategy of Montenegro 2024-2027.
Vujović assessed the lowering of labor costs for businessmen as affirmative.
He said that wage growth that is greater than productivity growth inevitably leads to price increases, i.e. inflation, and that the indirect effects will still lead to an increase in employers' wage budgets because, based on the hierarchy and systematization of jobs, wages will have to be proportional to everyone increase, in order to retain good staff.
"The planned measures affect the labor market, and businessmen cite the lack of labor force as the main business barrier. These measures will also increase wages in the public sector, which are higher than in the economy, which leads to an outflow of personnel from the private sector to the public sector. Paradoxically , but that's how the economy has to provide earnings for itself and the public sector," the announcement says.
It is stated that the implementation of policies created a few years ago led to inflation, but then the stigmatization of businessmen began.
"So the Government fights against them by limiting margins, while the analysis done by a team of professors from the Faculty of Economics in Podgorica shows that limiting margins does not create deflation. This has been proven in similar actions in the region. The analysis is available to the Government, it should be studied and considered her findings," the statement added.
PKCG said that it is crucial to develop a system that will enable higher productivity, administrative moves without productivity growth will not give the expected results.
"The reason for inflation in the previous period was supported by Vujović with exact data. Namely, in 2023, the growth of wages in trade compared to 2021 was 30 percent, in the same period the growth of import prices was 29,1 percent, and the growth of productivity was only 4 percent." , says the statement.
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