This report covers the main macroeconomic releases from January 3 until February 5, 2014 as well as the financial and political events that took place in Montenegro during this period. Corporate news for companies including Canada’s SNC-Lavalin and Chinese firm CRBC is also summarized.

The EBRD kept Montenegro’s 2014 growth forecast unchanged at 2%. Growth will be driven by both strong external and internal demand. The outlook is less optimistic than the latest World Bank projection for 2.5% GDP expansion this year.

The 2013 budget deficit narrowed 34.4% to EUR 128mn (3.9% of GDP), as stronger revenue growth offset a milder increase in expenditures. The CPI inched up 0.3% year on year in December 2013 after recording a zero annual growth in November due to slower decline of food and transport costs.

Key Points:

• Canada’s SNC-Lavalin is interested in a EUR 54 expansion/upgrade of Montenegro’s Tivat Airport. The Montenegrin government and Chinese firm CRBC have initialled the contract on the key Bar-Boljare motorway project, which will link Montenegro’s Adriatic coast with the border with Serbia in the north.

• Montenegro’s ILO-definition unemployment rate should decline to 19.4% in 2014 from 19.7% estimated for 2013.

• Net FDI inflow to Montenegro shrank 36.3% year on year to EUR 268.4mn in January–November, deteriorating from a 25.7% year on year decrease as of end-October, due to falling equity investments.

• December’s industrial production growth cooled to 14.5% year on year from 21.4% year on year the month before as rising manufacturing and mining/quarrying output was partly offset by falling utilities production.