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Montenegro Country Report - January, 2015

  • February 2015
  • -
  • Emerging Markets Direct Media Holdings
  • -
  • 22 pages

This report covers the key macroeconomic and financial releases as well as the political events from Montenegro for the period of January 6 - February 5, 2015.

The European Bank for Reconstruction and Development (EBRD) predicted a 3% economic growth for Montenegro in 2015 in the January edition of its Regional Economic Prospects report, improving its forecast from the previous edition released in September. The more optimistic forecast is based on expectations for strong FDI inflows and progress on a major highway project, the bank said in the report. At the same time, the World Bank forecasted that Montenegro's GDP will grow by 3.4% in 2015, quickening from an estimated 1.5% rise in 2014. The country's economic growth is forecast to cool in 2016 to 2.9% and to 3.0% in 2017.

Montenegro's government plans to scrap VAT and imports fees on investors during the period of construction and equipment of large investment projects, including construction of five and more stars hotels, energy and manufacturing utilities.

Montenegro's economy ministry has started preliminary talks with bidders in a tender to concession offshore oil and gas exploration blocks. The country opened the tender in August 2013, offering investors to apply for one or more of the overall 13 blocks in the Adriatic offshore. It has said it will pick up not one but several investors.

Key points:

o The 2014 budget gap stood at EUR103.5mn

o The number of foreign tourists visiting Montenegro rose 8% y/y in December

o Industrial output contracted by 7% in December

o Unemployment rate fell to 16.4% in Q3 - labour force survey

o Bank assets rose 5.9% y/y to EUR3.13bn at end-December

Table Of Contents

Montenegro Country Report - January, 2015



Government targets 2015 GDP growth at 3.5%4

World Bank expects Montenegro's GDP growth to accelerate to 3.4% in 20154


Consumer prices edge down 0.3% y/y in December4

EU harmonised deflation deepens to 0.6% y/y in December5

PPI inflation slows to 0.9% y/y in December6

3.Industry and Trade7

Industrial output falls 7% y/y in December7

Industrial sales rise 7.1% y/y in December7

Retail sales grow 1.4% y/y in November8

4.Labour Market8

Monthly average net wage falls 0.4% y/y in December8

Unemployment rate falls to 16.4% in Q3 - labour force survey9

Unemployment rate rises to 15.14% in early February - employment agency9

Unemployment rate edges down to 14.92% in early January - employment agency9


Foreign tourist arrivals increase 8% y/y in December9


Finance ministry revises 2014 budget gap up to EUR103.5mn10

Montenegro sells EUR15.2mn of 182-day T-bills at slightly lower yields12


Bank assets growth speeds up to 5.9% y/y at end-December13

Bank deposits growth speeds up to 10% y/y in December13

Average lending interest rates fall to 9.02% in December14

Commercial banks loan portfolio to increase 4% in 2015 - govt14

Mandatory reserves of Montenegrin banks at EUR214.9mn at end-December15


2014 trade gap widens 3.43% y/y on lower exports15

Jan-Nov net FDI inflow rises 17% y/y to EUR314.1mn16


Montenegro starts talks with bidders in oil/gas concessions tender16

Government plans to scrap VAT, imports fees on large investments17

Montenegro to grant state aid for investments above EUR500,00017

Montenegro improves position in Heritage Foundation's 2015 Economic Freedom Index17

Montenegro to offer for sale stakes in flag carrier, four other companies in 201518

PzP seeks investigation of key motorway loan from China18

EPCG to finance alone construction of 250MW thermal power unit if fails to attract investor by end-March18

Italy's Terna to launch construction of submarine power link with Montenegro - report19

World Bank sees SEE countries' growth accelerating to 1.3% in 201519

CHF strengthening to affect strongly Montenegrin firms and individuals, but poses no risk to economy - c-bank21

EBRD raises Montenegro's 2015 GDP growth forecast to 3.0%21

Montenegro to invest EUR52.3mn in rule of law, EUR47mn in improvement of democratic environment22

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