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IntelliNews - Montenegro Country Report - 2012
Emerging Markets Direct, May 2012, Pages: 14
The IntelliNews Montenegrin Country Report is a monthly report, covering the major macroeconomic indicators and trends in Montenegro, as well as important political developments. Prepared by local analysts, it provides the most accurate data, updated regularly according to the data changes noted by the whole range of statistics sources. It will save the time you would need to track the figures and sources independently and will provide you with thorough analysis.
Rising fiscal imbalances in the country prompted a revision of Montenegro's budget as it became evident that the initially projected budget gap of 1.05% of GDP will be definitely exceeded. To bring extra revenue, the government will impose new taxes and raise the excise duties on heating oil and gas. The deficit will reach 2.5% of GDP in 2012 and public debt will rise to 50.1% of GDP.
To ensure budget gap financing and debt servicing, the government concluded in April a credit arrangement with Credit Suisse for EUR 150mn. State debt will thus increase by EUR 98mn, or 3pps to 48.1% of GDP, according to finance ministry calculations.
Meanwhile, the IMF slashed its projection for Montenegro's economic growth to 0.2% this year on real activity in Europe slow down and deteriorated near-term growth prospects in emerging Europe.
At the same time, the effects from the vulnerable external environment on the tiny country's economy are increasingly seen through plunging net FDI (57.4% y/y to EUR 33.3mn in Jan-Feb), declining exports (by 24% y/y in Q1) and expanding trade gap.
EXECUTIVE SUMMARY
MACROECONOMIC OVERVIEW
IMF slashes Montenegro's 2012 GDP growth forecast to 0.2%
Montenegro to borrow EUR 150mn from Credit Suisse, debt to rise to 48% of GDP
Montenegro raises EUR 2.6mn through 6-mo T-bills issue, yields rise
IMF concludes Montenegro does not need precautionary arrangement - FinMin
REAL SECTOR
1. GDP
2. Inflation
Consumer price inflation cools off to 2.7% in March
Harmonised inflation slows to 2.1% y/y in March 2012
Producer prices down 1% y/y in Q1 2012, 1.5% y/y in Mar
Minimum expenditures of households on the rise in March 2012
3. Industry and Trade
Industrial output shrinks14.7% y/y in Q1 on weak utility sector
Retail sales growth slows to 5.8% y/y in March 2012
Export prices in industry down 6.8% y/y in Q1, import prices up 2.4%.
4. Labour Market
Average net wage up 1% y/y in March
5. Tourism
Foreign tourist arrivals up 22.6% y/y in March 2012
FISCAL SECTOR
Govt approves budget revision, deficit estimated at 2.5% in 2012
Public debt grows to 45.2% of GDP in Feb
Budget deficit stays at 1.6% of GDP in Jan-Mar - GDDS data
FINANCIAL INTERMEDIATION
Bank assets shrink 5.1% y/y in Mar to 81% of GDP
EXTERNAL SECTOR
Net FDI plunges 57% y/y in Jan-Feb 2012
CA gap narrows to 19.4% of GDP in 2011
Trade gap expands 20.6% in Q1 on weak exports
STRUCTURAL REFORMS
Turkey's Toscelik buys Montenegro's steel plant Zeljezara Niksic for EUR 15.1mn
Bosnian publisher Avaz abandons plans to buy Montenegro's Pobjeda
Magyar Posta interested in public-private partnership with Montenegro Post
Table 1 Montenegro: GDP
Table 2 Montenegro: CPI inflation, %, y/y
Table 3 Montenegro: Industrial output, %, y/y
Table 4 Montenegro: Public debt, EUR mn, eop
Table 5 Montenegro: Total assets of commercial banks, EUR mn, eop
Table 6 Montenegro: Credits extended by commercial banks, EUR mn, eop
Table 7 Montenegro: Deposits held at commercial banks, EUR mn, eop
Table 8 External trade, EUR mn
Figure 1 Montenegro Producer Price Index
Figure 2 Montenegro Industrial Output
Figure 3 Montenegro Average Wage
Figure 4 Montenegro Bank Assets
Figure 5 Montenegro Bank Loans
Figure 6 Montenegro Bank Deposits
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