Montenegro’s GDP growth seen easing to 2.5% in 2014, vice c-bank governor Fabris says

By bne IntelliNews October 21, 2013

Montenegro's economy should expand by some 2.5% in 2014, easing from up to 3% expected for this year, vice central bank governor in charge of financial stability Nikola Fabris was cited as saying by TV and radio broadcaster RTCG.

According to the latest data from the statistics office, the country's GDP grew by 3.4% y/y in the second quarter of 2013, following a 1.1% y/y rise in the first three months of the year.

Reducing the public debt should be Montenegro's priority in the coming years, Fabris said. The public debt-to-GDP ratio reached nearly 53% at end-August 2013, compared to 51% a year earlier and just 29% at end-2008.

Speaking about the latest austerity measures prepared by the finance ministry, Fabris said that the proportional tax regime is better than the progressive taxation. The latter will penalize those who are earning more and could undermine the investment climate and lead to concealment of wages. Fabris added that the implementation of a progressive taxation in developing and transition economies did not bring good results in the past. Montenegro is currently considering raising the personal income tax as of January 2014 after the so-called crisis tax introduced earlier this year to help raise the budget revenue, local media reported earlier in October. The finance ministry is reportedly analysing several options to leave the tax higher, including introducing a progressive income taxation, or raising the 9% flat tax to 10-12%. The measures are expected to boost budget revenue by up to EUR 18mn, depending on the scenario to be chosen, and help finance the country’s rising budget gap.

Regarding bankrupt aluminum producer KAP, Fabris said that the government should find a strategic investor for the company acknowledging that it be hard to make the company profitable again without subsidies for electricity. The situation is aggravated by falling prices of aluminum on the international markets. Investors from India, Germany, Poland, Turkey and Croatia have already indicated they are interested in taking over KAP but none of them has yet sent a concrete offer to the government.

Related Articles

Ex-Montenegrin President Marovic missing after receiving prison sentence

Montenegro’s court issued an arrest warrant on May 12 for former President Svetozar Marovic who has not been found in his hometown and has not ... more

Adriatic ports hit by Venice tourist clampdown

The number of cruise ships visiting Dubrovnik and other Croatian ports is set to fall dramatically in 2017, a new report presented at the Adriatic Sea Forum has revealed.  As the historic ... more

Montenegro’s parliament ratifies resolution on Nato membership

Montenegro’s parliament ratified the protocol on the country’s Nato membership on April ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss