This report covers the main macroeconomic releases from March 5 untill April 4 as well as the financial and political events that took place in Montenegro during this period.

Montenegro's GDP expanded by a strong 3.5% in 2013, beating government estimates and recovering from the 2.5% contraction recorded in 2012. The IMF sees Montenegro’s GDP expanding by 2.7% this year, slowing from a 3.5% growth in 2013 due to limited tourism capacity.

The CPI declined for a second straight month in February, falling by 0.6% year on year following a 0.4% year on year drop the month before, dragged down by falling food, transport, clothing and footwear and communication costs. The industrial production growth slowed to 5.7% year on year in February, from 7.4% year on year the month before due to falling utilities production and slower increase in manufacturing sector output.

The budget deficit narrowed 30.5% year on year to EUR 31.3mn in January-February, as strong revenue growth offset a mild increase in expenditures. Net FDI inflow to Montenegro more than doubled in annual terms in January to EUR 17mn from EUR 6.6mn a year ago.

The 2013 current account gap shrank 17.1% year on year to EUR 486.9mn , following a 2.5% increase in 2012, thanks to narrowing foreign trade deficit, rising revenue from tourism services and higher net income from abroad.