Montenegro’s CA gap narrows 19% y/y to EUR 192mn in Q1 2013

By bne IntelliNews July 2, 2013

Montenegro’s current account gap shrank 18.8% y/y to EUR 192mn in January-March on the back of narrowing trade deficit and rising net income from abroad, central bank data showed.

Exports rose 6.3% y/y to EUR 95mn in Q1, partly reflecting a low prior year base, whereas imports contracted 9.0% to EUR 353mn over the period as domestic demand remains weak. The January-March foreign trade gap, thus, shrank 13.6% y/y to EUR 258mn, equalling to 7.4% of the full-year GDP projection.

The income account surplus jumped 51% y/y to EUR 33mn in Q1 also helping redress the CA gap. The January-March increase of net income was mainly driven by rising net compensations of employees (up 6.4% y/y to EUR 45mn) and lower net outflow of other investments (mainly interest payments on loans and other financial assets).

On the other hand, the Q1 net current transfers dropped 16% y/y to EUR 26mn, reflecting falling remittances inflow (down 8.3% to EUR 33mn).

The financial account surplus edged up 0.6% y/y to EUR 143mn in January-March on rising other investments. Net FDI recorded a mild 2.2% y/y drop to EUR 66mn in Q1. However, they covered 34% of the Q1 current account deficit, improving from 28.3% a year earlier.

Portfolio investments’ negative net balance widened to EUR 8.3mn from EUR 2.7mn a year earlier due to falling equity and debt securities investments of non-residents.

Montenegro's 2012 current account gap widened 2.4% to EUR 587.2mn after shrinking nearly 24.0% in 2011, mainly due to widening foreign trade deficit. 

Montenegro's balance of payments, EUR mn Q1'12 Q1'13 y/y,%
Current account -236.6 -192.2 -18.8
--trade gap -298.9 -258.3 -13.6
--services 9.0 6.6 -26.2
--income, net 22.0 33.2 51.0
--current transfers 31.3 26.3 -16.0
Capital account 1.0 -0.1 -106.3
Financial account 141.8 142.6 0.6
--FDI net 67.0 65.5 -2.2
--portfolio investments -2.7 -8.3 210.2
--other investments 63.5 68.9 8.5
Changes in resrve assets of the CBCG 14.1 16.6 17.7
Net errors and omissions 93.9 49.6 -47.1
Source: CBCG      

Related Articles

Veteran Montenegrin politician Milo Djukanovic to run for president in 2018

Montenegro’s ruling Democratic Party of Socialists (DPS) will most likely propose its veteran leader, former president and prime minister Milo Djukanovic, to ... more

Montenegrin court sentences opposition leader for protest violence

Montenegro’s court in Podgorica sentenced Milan Knezevic, one of the leaders of pro-Russian opposition Democratic Front, to 7 months in jail on October 18 ... more

Montenegro’s court unfreezes A2A's shares in power monopoly EPCG, paving way for sale of stake

The high court of Podgorica said it has decided to unfreeze the shares of Italy’s A2A in Montenegro’s power firm EPCG after ... more

Dismiss