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Kosovo and Montenegro Country Risk Report Q4 2018

Kosovo and Montenegro Country Risk Report Q4 2018

We believe that bilateral relations between Kosovo and Serbia will remain cool over the coming years as they continue to hold fundamentally different views regarding the sovereignty of Kosovo. Kosovo is likely to strongly reject any ideas that would seek to divide the country, which will therefore keep the country's short- and long-term political risk score weak at 39.4 and 53.5 (out of 100) respectively.

We expect Kosovo's economic growth to pick up over the coming quarters. Growth will be driven by continued investment in major infrastructure projects, which more than offsets slowing export growth. We therefore maintain our 2018 and 2019 growth forecasts at 4.0% and 3.7%, respectively.

Key Risks



Less favourable external economic conditions could stem the flow of remittances and dry foreign direct investment inflows – both of which are key lifelines for Kosovo's economy. This could lead to growing unemployment, which already stands at around 30%, and social unrest, which in turn could exacerbate divisions among the population along ethnic and/or religious lines. A strong international military and diplomatic presence would prevent an escalation of violence, but the country's bid towards progressive political normalisation would face another blow.


Brief Methodology
Kosovo – Executive Summary
Core Views
Key Risks
Kosovo – Country Risk Summary
SWOT
Economic – SWOT Analysis
Political – SWOT Analysis
Economic Growth Outlook
Infrastructure Investments To Drive Kosovo's Growth Higher
GDP By Expenditure Outlook
TABLE: PRIVATE CONSUMPTION FORECASTS
TABLE: PUBLIC CONSUMPTION FORECASTS
TABLE: FIXED INVESTMENT FORECASTS
TABLE: NET EXPORTS FORECASTS
TABLE: GDP GROWTH FORECASTS
10-Year Forecast
The Kosovar Economy To 2027
Economy To Remain Least Developed In Region
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Political Outlook
Domestic Politics
Breakthrough In Kosovan-Serbian Relations Still A Way Off
TABLE: POLITICAL OVERVIEW
Long-Term Political Outlook
Political Future Far From Certain Despite Serb Agreement
Kosovo & Montenegro Country Risk Q4 2018ContentsMontenegro – Executive Summary
Core Views
Key Risks
Montenegro – Country Risk Summary
SWOT
Economic – SWOT Analysis
Political – SWOT Analysis
Economic Outlook
Economic Growth Outlook
Montenegro's Growth To Cool Following Q118's Outperformance
GDP By Expenditure Outlook
TABLE: GDP GROWTH FORECASTS
TABLE: PRIVATE CONSUMPTION FORECASTS
TABLE: GOVERNMENT CONSUMPTION FORECASTS
TABLE: FIXED INVESTMENT FORECASTS
TABLE: NET EXPORTS FORECASTS
10-Year Forecast
The Montenegrin Economy To 2027
BE Reforms Crucial For Convergence
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Political Outlook
Domestic Politics
Montenegro's Broad Policy Continuity To Bode Well For Further Reforms
TABLE: POLITICAL OVERVIEW
Long-Term Political Outlook
Converging Towards The EU
Global Macro Outlook
Fewer Negative Surprises, But Trade Risks Rising
TABLE: GLOBAL MACROECONOMIC FORECASTS
TABLE: DEVELOPED STATES – REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS – REAL GDP GROWTH, % y-o-y
Index Tables
TABLE: KOSOVO – MACROECONOMIC DATA & FORECASTS
TABLE: MONTENEGRO – MACROECONOMIC DATA & FORECASTS

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