Montenegro

Years

Targets and attainment

Classification

2001-23

joined with Serbia in Federal Republic of Yugoslavia and its successor State Union of Serbia and Montenegro, but beginning to decouple with adoption of Deutsche Mark as parallel currency 1999 and sole legal tender end-2000, then euro from 2002; 2006 referendum followed by independence; government aims to join EU; central bank (set up 2000) concerned with credit growth, banking supervision and regulation; large and growing banking sector, mainly foreign-owned, highly concentrated; post-independence boom followed by large impact from GFC; central bank responds strongly, but banking system needs major and lengthy adjustment; structural fiscal deficit emerges and leads to increasingly problematic long-term rise in debt ratio; 2010 legal changes raise central bank independence and tighten banking regulation; very large highway project from 2015 likely to further increase debt ratio, despite strategy of fiscal consolidation; ongoing efforts to improve financial supervision and safeguard financial stability, but little response to IMF calls for banking sector consolidation; 2017 three domestic banks, one large, identified as weak, placed under supervisory action plans; very steep recession from Covid-19 but strong, mainly containment and fiscal but partly monetary, response, and rebound 2021; 2022 major new programme to arrest outward migration; war in Ukraine brings commodity price rises and affluent inward migration; 2023 some concern re independence of central bank; statistical data better but scope for improvement

use of another sovereign’s currency UASC