Vuković: Total public debt stabilized, no plans to finance the Pension and Disability Insurance Fund from debt

Montenegro's total public debt has stabilized and at the end of the second quarter of this year it amounted to 4,8 billion euros or 60,8 percent of gross domestic product (GDP), announced Finance Minister Novica Vuković.

"Net public debt amounted to 4,2 billion euros or 53,6 percent of GDP," Vuković said in the Parliament, responding to a parliamentary question from Europe Now Movement (PES) MP Boris Pejović, about how much Montenegro has borrowed from January 1, 2021 to date.

Vuković stated that as of January 1, 2021, over 2,3 billion euros of old debts have been repaid, and that almost the entire public debt is due during the term of this Government.

"We have a current spending surplus and none of the Ministry's borrowing went to mandatory expenses," said Vuković, adding that there are 450 million euros in the Treasury, and that a fiscal reserve should be prepared for next year, especially 2027, when 1,2 billion euros are due.

When asked by Democratic Party of Socialists (DPS) MP Nikola Milović regarding the financing of the deficit of the Pension and Disability Insurance Fund (PIO), he replied that pensions are not financed from debt.

"The state regularly provides additional funds from the budget to guarantee the regular payment of pensions and protect the living standards of pensioners," Vuković said.

He recalled that in the first nine months of this year, total contributions amounted to 290,7 million euros, which is 32,4 percent less than in the same period last year and 7,1 percent less than planned.

"All adopted measures envisaged by the fiscal strategy are yielding more than expected results, while the cumulative growth in budget revenue of 150 million euros from indirect taxes is compensating for the decline in revenue from contributions," Vuković announced.

He added that the financing of the Pension and Disability Insurance Fund is realized from general budget revenues and that its financing from borrowing is not planned.

When it comes to increasing pensions, he reminded that three adjustments are planned annually according to the Swiss formula, and that this year this happened in January, May and September, making the cumulative adjustment 12,15 percent.