Germany: Selected Issues

This Technical Assistance Report on Montenegro highlights Public Investment Management Assessment. Due to the importance of the tourism sector, the pandemic has had a deep economic impact. In addition, as government debt already exceeds one hundred percent of gross domestic product, fiscal space to increase public investment is limited. In this context, a strengthened public investment management (PIM) framework would contribute to maximize its impact on economic growth. Recent trends in capital expenditures and capital stock signal that there is room for improving the efficiency of public investments in Montenegro. The authorities have introduced several reforms in recent years to strengthen the PIM framework. Through the reform efforts, Montenegro has developed a stronger PIM framework but there is still room for improvement. Notwithstanding these efforts, there is significant room to strengthen public investment management in Montenegro. IMF estimates indicate that there is an efficiency gap of 35 percent. Public investment could better support the economic recovery if specific actions are taken to improve the PIM framework.