EBRD keeps Montenegro’s 2014 GDP forecast at 2.0%

By bne IntelliNews January 21, 2014

The European Bank for Reconstruction and Development (EBRD) expects Montenegro's economic growth to speed up to 2% in 2014 from 1.5% estimated for 2013, the bank said in the January edition of its Regional Economic Prospects keeping unchanged the forecasts from the previous edition of the report in November

In 2014 growth will be driven by both external and domestic demand, the bank said.

The EBRD’s 2014 outlook remains considerably less optimistic than the government’s expectations for a 3.6% GDP expansion this year. It is also below the latest projections ​of the EC and the World Bank for 2.3% and 2.5% growth in 2014, respectively.

Economic activity in Montenegro started recovering in the first half of 2013 underpinned by rising exports, the EBRD underscored. However, the country’s current account deficit remains among the region’s highest at around 20% of GDP.  Montenegro’s fiscal position has weakened after the payment of EUR 103mn of state guarantees on aluminium producer KAP’s loans in August 2013. The public debt has increased sharply in recent years, the EBRD also said.

Montenegro’s outlook will remain below the average for the SEE region in both 2013 and 2014 (of 2.0% and 2.1% respectively).

South East Europe, GDP, y/y,% 2012(e) 2013(f) 2014(f)
Albania 1.6 1.5 1.7
Bosnia -0.5 0.8 1.8
Bulgaria 0.8 0.7 1.8
Kosovo 2.5 2.5 3.5
Macedonia -0.3 3.0 3.0
Montenegro -0.5 1.5 2.0
Romania 0.7 2.5 2.4
Serbia -1.7 2.2 1.3
South East Europe 0.4 2.0 2.1
Source: EBRD, REP January 2014      

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