EXECUTIVE SUMMARY 3
REAL SECTOR 4
1. GDP 4
Montenegro’s GDP growth improves to 3.2% in 2015 4
IMF forecasts Montenegro’s 2016 economic growth at 4.6% 4
2. Inflation 5
Montenegro’s HICP inflation slows to 0.5% y/y in February 5
Montenegro’s CPI inflation slows to 0.1% y/y in February 6
Montenegro's PPI inflation inches up 0.2% y/y in February 6
3. Industry and Trade 6
Montenegro's retail sales growth accelerates in February 6
Montenegro's industrial sales plunge 53.2% y/y in February 7
4. Labour Market 7
Montenegro’s unemployment rate falls to 17.6% in 2015, Labour Force Survey shows 7
Montenegro’s unemployment rate cools to 18.23% as of April 4 7
Montenegro’s monthly average net wage growth stays at 1.7% y/y in February 8
Montenegro’s unemployment rate rises to 18.52% as of March 7 8
5. Tourism 8
Foreign tourist arrivals in Montenegro rise 8.0% y/y in February 8
Montenegro’s unemployment rate falls to 17.9% in Q4, Labour Force Survey shows 9 FISCAL SECTOR 9
Montenegro’s 2-mo budget gap contracts 21.9% y/y on higher income 9 FINANCIAL INTERMEDIATION 10
Mandatory reserves of Montenegrin banks rise 12.8% y/y to €241mn at end-February 10
Montenegro’s NPL ratio at 12.7% in February 10
Average lending interest rate in Montenegro rises to 8.63% in February 11
Montenegro’s bank deposits growth accelerates to 13.9% y/y in February 11
Montenegro’s bank assets growth accelerates y/y in February 11
IMF urges Montenegro to deal with weak banks 12
Hypo-Alpe Adria Bank Montenegro says CHF loan conversion caused €20.6mn loss 12
Montenegro’s banking sector turns to loss in 2015 13
Montenegro’s bank assets growth slows y/y in January 13 EXTERNAL SECTOR 14 Montenegro’s trade gap widens 11.4% in Jan-Feb 14
Montenegro’s net FDI inflow shrinks y/y to €8mn in January 14
Montenegro’s 2015 current account gap contracts 7.6% y/y to €486mn 15 STRUCTURAL REFORMS AND CORPORATE NEWS 15 Montenegro’s Lustica Bay luxury marina to be operational in 2017 15
Montenegro to invest almost €1bn in regional development in 2016 15
Montenegrin prosecutors reportedly probe flag carrier’s contract with UAE’s Etihad Airways 16
EC to provide €67.2mn to Bosnia, Croatia and Montenegro for cross-border cooperation 17
China’s CRBC hopes to get approval for Montenegro’s motorway project by March 25 17
Montenegro converts €2.1mn of flag carrier's debt into capital 17
First Hilton hotel to open doors in Montenegro within two months 18 POLITICS 18 Montenegro’s deputy PM Luksic resigns to focus on UN secretary-general application 18
Montenegro hopes to open all EU chapters by H1 2017 18
Montenegro’s parliament speaker cancels debate on his own dismissal 19
Montenegro could join Nato in spring 2017, alliance official says 19
Four opposition parties in Montenegro sign cooperation pact 20
Montenegro’s ruling DPS, opposition could resume talks on power sharing, fair elections 21
EP urges Montenegro to set corruption fight as priority 21
Montenegro’s parliament to vote on speaker’s replacement on March
Montenegro Country Report - March, 2016 Description
This report covers the key macroeconomic and financial releases as well as the political events from Montenegro for the period of March 6-April 5, 2016.
Montenegro could become a member of Nato in spring next year, according to general Petr Pavel, chairman of the NATO military committee.
Meanwhile, the prime minister Milo Djukanovic said that the country hopes that it will open all chapters in its negotiations for membership of the European Union by the first half of 2017.
The European Parliament has urged Montenegro to set as its top priority the fight against corruption which it says remains serious problem for the country.
Montenegro’s ruling Democratic Party of Socialists (DPS), led by prime minister Milo Djukanovic, and several opposition parties resumed the negotiations on the oppositions joining to the government as a key prerequisite for setting conditions for fair elections this autumn.
At the same time, the four biggest opposition parties in Montenegro – Demokratska Crna Gora (DCG), the Democratic Front (DF), DEMOS and United Reform Action (URA) –signed a cooperation agreement ahead of local and general elections this year.
Montenegro plans to invest €971.4mn in regional development in 2016 according to the government's 2014-2020 strategy.
The budget deficit shrank 21.9% y/y to €34.1mn in the first two months of 2016
The number of foreign tourists visiting Montenegro increased by 8.0% y/y to 17,741 in February
Industrial sales plunged by 53.2% y/y in February
Bank assets went up 11.1% y/y to €3.462bn at end-February