European Commission increases Montenegro’s GDP growth projections

    In its Spring Economic Forecast, the European Commission increased the growth projection of Montenegro’s economic activity from earlier 3% (as projected by the winter forecast) to 3.3% in 2015, and from 3.7% to 3.9% in 2016.

    The report expects Montenegro’s economic growth in 2014 to be at the rate of 1.4%, wheras it projects the unemployment rate of 17.3% in 2015 and 16.1% in 2016.

    According to the report’s projection, Montenegro’s public debt will amount to 62% of GDP in 2015, and to 65.7% of GDP in 2016.

    The 2015 budget deficit will be at the level of 4.5% and 4% in 2016, the forecast reads.

    In 2015, the European Commission predicts Montenegro’s inflation to be at the rate of 1.2%, and 1.8% in 2016.

    “Growth is expected to accelerate driven by investment; notably in a motorway with numerous (and expensive) tunnels and bridges, several tourist resorts, and some recovery of banks’ lending activity supporting private consumption. However, the debt-financed highway will also strain on government finances, fuelling budget deficits and public debt levels, in particular in case of cost overruns,” the latest European Economist Forecast states.

    Source: Government of Montenegro