Montenegro Country Report - January, 2014

USD $149.00
Montenegro Country Report - January, 2014

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.

Table of Contents

Executive Summary

1. Macroeconomic Overview
1.1 EBRD keeps Montenegro’s 2014 GDP forecast at 2.0%
1.2 World Bank keeps Montenegro's GDP growth forecast at 2.5% in 2014

2. Real Sector
2.1 GDP
2.1.1 Montenegro sees GDP growth speeding up to 3.6% in 2014

2.2 Inflation
2.2.1 Montenegro's consumer prices inflation quickens to 0.3% y/y in Dec 2013
2.2.2 Montenegro's EU-harmonised inflation edges up 0.4% y/y in Dec 2013.
2.2.3 Montenegro's PPI edges down 0.6% y/y in December 2013.

2.3 Industry and Trade
2.3.1 Montenegro's industrial output rises 14.5% y/y in Dec 2013
2.3.2 Montenegro’s industrial sales growth eases to 4.3% y/y in Dec 2013
2.3.3 Montenegro's retail sales growth strengthens to 14.5% y/y in Dec 2013

2.4 Labor market
2.4.1 ILO sees Montenegro’s unemployment rate edging down to 19.4% in 2014
2.4.2 Montenegro's average net wage declines 3.8% in real terms to EUR 479 in 2013

2.5 Tourism
2.5.1 Montenegro collects over EUR 720mn in tourism revenue in 2013.
2.5.2 Foreign tourist arrivals to Montenegro rise 7% y/y to 15,324 in Nov 2013.

3. Fiscal Sector
3.1 Montenegro’s 2013 budget gap shrinks 34% to EUR 128mn, equals 3.9% of GDP
3.2 Montenegro's public debt increases 11% y/y to EUR 1.9bn at end-November 2013
3.3 Montenegrin government includes Montenegro Airlines in 2014 privatisation plan
3.4 Montenegro might borrow more than planned EUR 240mn in 2014
3.5 Montenegro sells EUR 18.5mn of 182-day T-bills, yields drop

4. Financial Intermediation
4.1 Montenegro’s bank asset rise 5.4% y/y to EUR 3bn at end-2013
4.2 Montenegro’s bank deposits growth strengthens to 6% y/y at end-Dec 2013
4.3 Montenegrin banks liquidity declines 9.3% m/m in November 2013 but climbs 28.2% ytd
4.4 Greek businessman Petros Stathis files buyout offer for Montenegro’s First Financial Bank

5. External Sector
5.1 Montenegro’s net FDI declines 36% y/y to EUR 268mn in Jan-Nov 2013
5.2 Russia tops list of Montenegro’s biggest investors in Jan-Nov 2013
5.3 Montenegro's 2013 foreign trade gap narrows 4% to EUR 1.4bn, equalling to 42% of GDP

6. Structural Reforms and Corporate News
6.1 Canada’s SNC-Lavalin interested in EUR 54 expansion/upgrade of Montenegro’s Tivat Airport.
6.2 Montenegro initials deal with Chinese investor on key Bar-Boljare motorway project.

Number of pages: 22
Release Date: Wed, 05 Feb 2014