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

Evolution Equity Partners closes $125mn cybersecurity-focused fund

Evolution Equity Partners announced on 17 July the final closing of a new fund with total capital commitments of $125mn to make investments in cybersecurity and next generation enterprise software ... more

Montenegrin court seizes passports of opposition leaders accused of coup attempt

Montenegro’s high court has seized the passports of two opposition leaders accused of plotting a coup as a precautionary measure. Andrija Mandic and Milan Knezevic – two of the leaders of the ... more

Russians continue to holiday in Montenegro despite warnings from Russian foreign ministry

The summer tourism season in Montenegro started earlier than expected and indicates that this year the revenue will exceed €1bn – the ... more