Podgorica, (MINA-BUSINESS) - Minister of Economic Development Nik Gjeloshaj believes that a larger agriculture budget and more investment in agricultural production, along with increased allocations to improve the competitiveness of the domestic economy, are among the long-term solutions that could help curb inflation growth in Montenegro.

“In addition, we must work on improving infrastructure through the construction of the motorway, modernization of the railway, and the arrival of low-cost carriers. All of this will positively affect the country’s economic growth and citizens’ living standards, and offset the administrative wage increases,” Gjeloshaj said in Parliament, responding to MPs’ questions.

Asked by MP Andrija Nikolic of the Democratic Party of Socialists (DPS) whether the Government has a strategy to protect citizens from uncontrolled price hikes, he replied that “there is no silver bullet.”

“There is no magic wand to solve this. We need a strategic plan,” Gjeloshaj said.

He added that inflation in Montenegro was slightly higher than in EU countries this year, while it had been at a similar level in the previous 15 years. According to him, inflation in neighbouring countries is identical to that in Montenegro.

“The main contributors to inflation this year were the increase in value-added tax (VAT) on tourism services from seven to 15 percent, higher beach prices, and wage growth, which caused greater consumption,” Gjeloshaj explained. 

He also stated that, food-industry prices have been stable over the past two years, with no excessive growth in that sector.