Podgorica, (MINA-BUSINESS) – It was concluded at a meeting of the Financial Stability Council that Montenegro’s financial system was comparatively stable, with moderate risks.
The Central Bank (CBCG) says in a press release that the Council discussed the preliminary results of supervision of the two banks, which had shown certain vulnerabilities, as well as a potential impact of the risk materialisation on the overall system.
“On the basis of the analysis of impact of all abovementioned factors on the overall economic stability, focusing on the stability of the financial system, the Council has concluded that the financial system is relatively stable, with the risks of moderate intensity,” the press release says.
The Council also discussed a communication on the financial stability for the second quarter and concluded that the GDP had continued to grow on quarterly level, which had a positive impact on the systemic risks.
According to the Central Bank, the economic indicators for the first six months of this year show that the positive trends from 2016 remained in the first six months of this year.
“In the first two quarters, a majority of sectors saw considerable growth as compared with the same period last year. The volume of activities has increased in the civil engineering, trade, tourism and industry, with particularly high growth of 117.8 percent seen in the energy sector,” the press release says.
The Q1 growth rate has been estimated at approximately 4.7 percent on the basis of the quarterly estimates.
The CBCG says that the positive trends were recorded for certain fiscal indicators, with the source budget revenues increasing by 12 percent year-on-year in the first two quarters.
“As for the budget expenditures, they were 7.9 percent higher than in the same period last year, and four percent lower than planned. The expenditure growth is a consequence of higher capital budget spending as compared with the corresponding period,” the CBCG says.
The Council concluded that the effects of fiscal consolidation were visible, which was reflected in a recent improvement of Montenegro’s credit rating by Moody’s.
“The control of fiscal risks and the related structural reforms are currently vital to the maintenance of fiscal, and consequently financial stability in the medium term,” the press release says.
The CBCG says that the Council concluded that the stability and quality indicators in the banking sector, insurance and capital markets were positive and on an upward trajectory.
The total fixed assets amounted to €4.31 billion at the end of the second quarter, up 4.3 percent on Q1.
“The lending activity of the banks, measured by the newly extended loans, amounted to €609.5 million in the first six months, up 6.9 percent year-on-year,” the CBCG says.
Longer version of article is available on a link MINA ENGLISH SERVIS
