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Kosovo and Montenegro Country Risk Report Q3 2018

Kosovo and Montenegro Country Risk Report Q3 2018

The arrest of a senior Serbian government official by Kosovar authorities in late March will likely keep tensions between Kosovo and Serbia elevated, and it is likely that both countries will show little willingness to improve ties over the coming quarters. This will continue to weigh heavily on Kosovo's long-term political environ-ment, with our long-term political score coming in at a weak 53.5 out of 100. Increased political uncertainty therefore continues to pose downside risks to the economy.

Kosovo's growth momentum slowed in Q417 to 3.2% y-o-y (from 4.4% y-o-y in Q317), and we are revising down our 2018 real GDP growth forecast to 4.0% (from 4.8% previously) as exports and remittances are likely to weaken over the coming quarters. That said, the economy will be supported by a recovery in infrastructure investment.


Brief Methodology
BMI Indices – Brief Methodology
Composite Score
Political Risk Index
Economic Risk Index
Operational Risk Index
Executive Summary – Kosovo
Core Views
Key Risks
Chapter 1.1: Economic Outlook – Kosovo
Economic Growth Outlook
Revising Down 2018 Growth Forecast Amid Softening Exports And Remittances
GDP By Expenditure Outlook
TABLE: PRIVATE CONSUMPTION FORECASTS
TABLE: PUBLIC CONSUMPTION FORECASTS
TABLE: FIXED INVESTMENT FORECASTS
TABLE: NET EXPORTS FORECASTS
TABLE: GDP GROWTH FORECASTS
Chapter 1.2: 10-Year Forecast – Kosovo
The Kosovar Economy To 2027
Economy To Remain Least Developed In Region
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Chapter 1.3: Political Outlook – Kosovo
Relations With Serbia Likely To Remain Tense
TABLE: POLITICAL OVERVIEW
Long-Term Political Outlook
Political Future Far From Certain, Despite Serb Agreement
Executive Summary – Montenegro
Core Views
Key Risks
Chapter 2.1: Economic Outlook – Montenegro
Economic Growth Outlook
Infrastructure And Tourism To Continue Supporting Growth
GDP By Expenditure Outlook
TABLE: GDP GROWTH FORECASTS
TABLE: PRIVATE CONSUMPTION FORECASTS
TABLE: GOVERNMENT CONSUMPTION FORECASTS
TABLE: FIXED INVESTMENT FORECASTS
TABLE: NET EXPORTS FORECASTS
Chapter 2.2: 10-Year Forecast – Montenegro
The Montenegrin Economy To 2027
BE Reforms Crucial For Convergence
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Chapter 2.3: Political Outlook – Montenegro
Domestic Politics
Remaining On EU Accession Path Following Đukanović's Presidential Win
TABLE: POLITICAL OVERVIEW
Long-Term Political Outlook
Converging Towards The EU
Chapter 3: Operational Risk
South East Europe
TABLE: LABOUR MARKET RISK
TABLE: LOGISTICS RISK
TABLE: TRADE AND INVESTMENT RISK
TABLE: CRIME AND SECURITY RISK
Chapter 4: BMI Global Macro Outlook
Signs Of Weakness, But Global Expansion Broadening
TABLE: GLOBAL MACROECONOMIC FORECASTS
TABLE: DEVELOPED STATES – REAL GDP GROWTH, % Y-O-Y
TABLE: EMERGING MARKETS – REAL GDP GROWTH, % y-o-y
TABLE: KOSOVO – MACROECONOMIC DATA & FORECASTS
TABLE: MONTENEGRO – MACROECONOMIC DATA & FORECASTS

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