US debt rating downgrade to affect Montenegro - Zorica Kalezic.

By bne IntelliNews August 18, 2011
Montenegrin economy will not be spared by the debt crisis in the United States and the European Union, Zorica Kalezic, advisor to the chief economist of the central bank, said in an interview for Atlas TV, as quoted by RTCG. The local economy and in particular foreign investment, exports and borrowing conditions, are expected to be affected the most due to the small size of the local economy and the limited ability to influence international monetary developments. Economic growth may slow down as outside recession enters Montenegro through the trade channels. The lowered ratings on American debt securities will translate into higher price of capital and a rise in risk premiums in Montenegro, which will have a negative impact on future borrowing potential of the country. Kalezic identified conservative budgetary stance and avoidance of state borrowing as the two main protection measures.
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