Montenegro Country Report - November, 2016

USD $475.00
Montenegro Country Report - November, 2016

This report covers the main macroeconomic releases from November 1 until November 30, 2016 as well as the financial and political events that took place in Montenegro during this period.
The European Commission said on November 9 that Montenegro has made good progress on its EU path and the pace of accession negotiations will continue to be determined by tangible results, especially on fighting corruption and organised crime.
Montenegro’s parliament approved a new government, led by Prime Minister Dusko Markovic, one of the most loyal allies of Democratic Party of Socialists (DPS) leader Milo Djukanovic, on November 28.
Montenegro’s special prosecution has extended an ongoing investigation into an alleged coup attempt, including in the list of suspects two Russians connected to the opposition Democratic Front (DF).
Montenegro’s opposition Democratic Front (DF) plans to call a new round of anti-government protests in December, aiming to provoke the appointment of an interim government and a new general election.
Montenegro’s central bank will recommend to the government to finance current public spending only from current revenues, and make cuts to "irrational spending" where this can be done without threatening the living standard of the population or the economic growth.

Key points:
• Consumer prices increased by 0.2% y/y in October, ending a seven-month declining streak
• The working-day adjusted industrial production swung to a 13.3% y/y fall in October
• The foreign trade gap widened by 13.1% y/y to €1.29bn in the first ten months of 2016


Table of Contents

1. EXECUTIVE SUMMARY 5
2. POLITICS 6
Montenegro’s parliament endorses new DPS-led government amid opposition boycott 6
Montenegro’s prosecution reportedly finds link between coup plot organisers and opposition DF 7
Montenegro opposition to call anti-government protests in December 8
EC says Montenegro makes good progress on EU path 9
Russian nationalists planned to kill Montenegrin PM Djukanovic, prosector claims 9
3. MACROECONOMIC OVERVIEW 11
Montenegro should cut "irrational public spending", central bank governor says 11
4. REAL SECTOR 11
4.1. GDP, forecasts 11
EBRD keeps Montenegro’s 2016 GDP growth forecast at 4.0% 12
4.2. Inflation 12
Montenegro’s HICP inflation accelerates in October 12
Montenegro’s consumer prices resume growth in October 13
Montenegro's PPI deflation cools in October 13
4.3. Industry and trade 14
4.3.1. Industrial production 14
Montenegro's industrial sales fall 5.5% y/y in October 14
Montenegro’s industrial output turns to decline in October 14
4.3.2. Construction volume 15
Number of building permits in Montenegro increases 30.4% y/y in Q3 15
Value of construction works in Montenegro jumps 37.3% y/y in Q3 15
4.4. Labour and retail 16
4.4.1. Unemployment and wages 16
Montenegro’s monthly average net wage up 5% y/y in October 16
Montenegro’s unemployment rate rises to 19.59% 16
4.4.2. Retail 17
Montenegro's retail sales grow by 2.4% y/y in September 17
5. EXTERNAL SECTOR AND TRADE 17
5.1. Balance of payments 17
Montenegro’s 9-mo current account gap more than doubles y/y to €417.5mn 17
5.2. Trade 18
Montenegro’s 10-mo trade gap widens 13.1% y/y 18
5.3. Foreign direct investment (FDI) 19
Montenegro’s net FDI down 54.6% in January-August 19
5.4. External debt 19
Montenegro’s public debt reaches 60.6% of GDP at end-June 19
6. PUBLIC SECTOR 20
6.1. Budget 20
Montenegro’s parliament adopts urgent budget revision 20
Montenegro’s 9-mo budget gap shrinks 90.6% y/y to €24mn 21
6.2. Government debt 22
Montenegro sells €80.41mn T-bonds to cover budget deficit 22
7. FINANCIAL SECTOR AND CAPITAL MARKETS 22
7.1. Banking system 22
Average lending interest rate in Montenegro falls to 6.73% in October 22
Montenegro’s bank deposits growth cools to 6.9% y/y in October 23
Montenegro’s bank assets growth slows to 6% y/y in October 24
7.2. Stock market 24
Montenegro Stock Exchange turnover more than doubles y/y in October 24
7.3. Credit ratings 25
Moody’s downgrades Montenegro’s rating to B1 on negative outlook, S&P revises outlook to negative 25
8. INDUSTRY AND SECTOR NEWS 26
EIB provides €120mn for projects in Montenegro 26
9. MAJOR CORPORATE NEWS 27
Four foreign companies plan to bid for 30% stake in Montenegro’s Luka Bar 27
CEAC launches litigation proceedings against Montenegro over KAP bankruptcy 27
Czech Skoda Praha to lose Montenegro power plant deal unless it secures new financing 28

Number of pages: 29
Release Date: Wed, 14 Dec 2016