Montenegro's 9-mo current account gap narrows 29% y/y to EUR 232mn

By bne IntelliNews December 12, 2013

Montenegro's current account gap shrank 29.1% y/y to EUR 231.7mn in January-September 2013, due to narrowing foreign trade deficit and rising net income from abroad, data from the central bank, CBCG, showed. The 9-months current account gap equalled to 7.0% of the full-year projected GDP, down from nearly 10.0% a year ago, according to IntelliNews calculations.

Exports increased 3.8% y/y to EUR 305.4mn in January-September supported by higher electricity sales abroad. Imports shrank 4.1% to EUR 1,299.7mn over the period. Therefore, the 9-months foreign trade deficit improved to 30% of GDP from 32% of GDP a year earlier. The service account surplus rose 2.4% y/y to EUR 625.5mn underpinned by higher tourism proceeds (up 2.6% to EUR 617.2mn). The net income from abroad climbed 56.7% y/y to EUR 42.3mn over the period due to higher compensation of employees, likewise helping narrow the overall CA gap.

The financial account surplus fell to EUR 42.4mn in January-September from EUR 122.7mn a year ago. Net FDI contracted 14.8% to EUR 275.6mn over the period due to lower investments in equity and reinvested earnings.

Montenegro's 2012 current account gap to GDP ratio remained broadly unchanged at 17.6% of GDP in 2012, reflecting high foreign trade deficit, central bank data showed. It is expected to decline to 16.9% of GDP in 2013 and narrow further to 16.3% in 2014, likely reflecting strong exports growth, the EC said in its latest autumn forecast.

Montenegro's balance of payments, EUR mn Jan-Sep'12 Jan-Sep'13 y/y,%
Current account -326.7 -231.7 -29.1
--trade gap -1,060.9 -994.4 -6.3
--services 610.6 625.5 2.4
--income, net 27.0 42.3 56.7
--current transfers 96.7 94.8 -1.9
Capital account -0.1 0.5 -617.7
Financial account 122.7 42.4 -65.5
--FDI net 323.3 275.6 -14.8
--portfolio investments -2.8 -26.3 842.9
--other investments -104.5 -185.9 78.0
Changes in resrve assets of the CBCG -93.3 -21.0 -77.5
Net errors and omissions 204.0 188.9 -7.4
Source: CBCG      


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