Montenegro Country Report - April, 2016

May 5, 2016

This report covers the key macroeconomic and financial releases as well as the political events from Montenegro for the period of April 6-May 5, 2016.
The European Commission lowered its 2016 economic growth forecast for Montenegro to 3.6%, as the economy is hampered by the weak recovery of bank lending. At the same time, the IMF expects that the country’s economy will post the highest growth, of 4.7%, among the countries in Emerging and Developing Europe this year. The World Bank made the most pessimistic forecast for a 3.3% growth.
Representatives of opposition parties in Montenegro signed a long-expected agreement with prime minister Milo Djukanovic's Democratic Party of Socialists (DPS) on the entry of the opposition to the government on April 26. However, the parties also signed another document, pledging that they will not form coalitions with the DPS either before or after the general election this autumn.
Montenegro advanced eight positions on the 2016 Press Freedom Index from Reporters Without Borders (RSF), but still remained among the worst in South-East Europe, ranking 106th out of 180 countries.
Montenegro’s prosecution has reportedly initiated an investigation into several former and current managers of power monopoly EPCG over consultancy contracts signed with Italy’s A2A, which is one of the company’s main owners.
The Montenegrin company of Canadian businessman Peter Munk - Adriatic Marinas – has sold its stake in Porto Montenegro marina project to the Investment Corporation of Dubai (ICD).

Key points:

• The budget deficit shrank 19.3% y/y to €47.2mn in the first quarter of 2016
• The number of foreign tourists visiting Montenegro increased by 15.9% y/y to 21,850 in March
• Industrial output swung to a 2.9% annual growth in March, following three months of decline
• Bank assets rose 9.6% y/y to €3.441bn at end-March

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