Podgorica, (MINA-BUSINESS) – According to President of the Social Democrats (SD) Parliamentary Group and representative of the European Alliance Boris Mugosa, it is necessary to implement genuine structural reforms based on thorough analyses and clear sustainable projections, as well as to diversify the economy and improve its competitiveness.

“On the other hand, insisting on economic logic based on administrative growth of consumption, without substantive reduction of unproductive expenditures, and on massive borrowing, does not lead to stability and sustainability of the financial system,” Mugosa stated in a press release.

Presenting economic facts, he said that Montenegro recorded the lowest gross domestic product (GDP) growth in the past eight years (excluding the pandemic year) and significantly below the planned growth for this year.

“Montenegro has recorded the highest foreign trade deficit in the last 15 years, with last year’s imports exceeding exports by around € 3.5 billion,” Mugosa said, adding that trends have been even worse this year.

According to him, outflow of foreign direct investments (FDI) in the first half of the year was 20.41 percent higher compared to the same period last year. Investments in productive sectors, such as companies and banks fell by more than 35 percent, while over 50 percent of FDI went into unproductive investments, primarily real estate – a segment that previously accounted for only around 20 percent.

“In addition, smaller companies, which are the backbone of the economy, accounting for 93 percent of all businesses and employing around 39 percent of the workforce, have been making losses for the past six years, while their capital today is a quarter lower than in 2019,” Mugosa concluded.