66th Meeting of the Financial Stability Council
21/11/2023
Today, the Financial Stability Council held its 66th meeting chaired by Radoje Žugić, the CBCG Governor and the Council Chairman. The Council Members, Novica Vuković, Minister of Finance, Željko Drinčić, President of the Capital Market Authority, and Marko Ivanović, President of the Council of the Insurance Supervisory Agency, attended the meeting. At the Governor’s invitation, the Director of the Deposit Protection Fund, Vojin Vlahović, also participated in the meeting.
The session discussed the Information on Financial Stability for Q3 2023. The data from this document point to industrial output growth in Montenegro during the first three quarters of the current year of 6% compared to the comparative period of 2022. In the same period, retail trade grew 15.9%. Data on collective accommodation for the first nine months of the current year show increased tourist arrivals (23.9%) and overnight stays (18.9%) compared year-on-year. The annual inflation rate in September this year was 7.9%.
Fiscal data for the nine months of the current year show a budget surplus of 2.7% of the forecasted annual GDP recorded owing to the primary revenues growth of 20.9% and the budget expenditures decrease of 6.2% compared to the plan. The current account deficit is still significantly high, although 2.24% lower in the first six months of 2023, year-on-year.
The trends characterising the banking sector continue to be positive in Q3. Banks’ total assets reached a historical maximum of 6.8 billion euros at the end of Q3 2023. At the end of the same quarter, banks’ capital amounted to 808.5 million euros, growing 7% quarterly or 31.8% annually. The non-performing loans continued to trend down, so their share in total loans at the end of Q3 this year was 5%. Deposits grew by 4.8% quarterly and by 11.2% annually.
According to the Council’s assessment, the systemic risk to financial stability can be characterised as moderate, and it requires continuing to monitor the financial system’s stability indicators carefully.
The Council emphasised the need for the swift adoption of the national FinTech strategy, emphasising the project’s importance for further developing Montenegro’s financial system.