The Government of Montenegro has proposed a major overhaul of its budget and fiscal responsibility framework, introducing tighter spending controls, stronger independent oversight and a more structured approach to long-term public finance management. The new law is expected to apply from 1 January 2027 and has been sent to parliament for urgent consideration.
A key change is the introduction of a formal medium-term budget framework covering the current year and the following three fiscal years. It would set expenditure limits for public bodies, track programme spending, assess fiscal risks and link annual budgets more closely to longer-term fiscal strategy.
The draft retains Montenegro’s fiscal benchmarks of a deficit of no more than 3% of GDP and public debt of up to 60% of GDP. Temporary departures would be allowed only in exceptional circumstances, while debt above the 60% threshold would trigger a formal plan to bring it back down.
The Fiscal Council would gain a stronger role, including supervision of the medium-term budget framework. If the government rejects its recommendations, it would have to explain that decision publicly within 30 working days.
The legislation also introduces spending reviews, stricter oversight of major public investments, an electronic investment register, gender-responsive budgeting and rules aligned more closely with EU fiscal standards.
