Credit Rating Agency Standard & Poor's Confirms Stable Outlook for Montenegro

By , 15 Sep 2018, 23:00 PM Business
Credit Rating Agency Standard & Poor's Confirms Stable Outlook for Montenegro Copyrights: Standard and Poor's

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15 September 2018 - Credit Rating Agency Standard & Poors published a new Report for Montenegro which confirmed the rating of the country, which is marked as "stable" while preserving the rating B + / B.

The fact that the credit rating agency Standard & Poor's has confirmed the rating given to Montenegro in 2017 for the second time, points to the expectation that after the third confirmation, the country’s credit rating could increase.

By confirming Montenegro's stable credit rating, another relevant global institution recognized the seriousness of implementing fiscal consolidation measures, as well as the overall increase in economic activity resulting from the improvement of general business conditions within the country. According to the Report, the current position of Montenegro on the rating list is the result of a strong economic growth that continued in 2018, estimated at 3,5%, based on the development of tourism, energy and infrastructure, and more specifically, the construction of the first section of the highway that will, as it is said, contribute to regional cohesion and security improvement. Analysts noted a strong growth of 16% in the number of visitors, as well as close to 12% in the number of overnight stays in the first half of the current year while predicting the possibility of additional expansion of both summer and winter tourism through investments.

Analysts point to the strong institutional position of Montenegro in the region as well as the potential for further development through the structural reforms that the country is currently implementing in order to join the European Union. According to the report, the crucial activities for achieving the Government's goals are the continuation of the implementation of fiscal consolidation measures, the reduction of the budget deficit and the reduction of public debt.

One of the expectations of Standard & Poor's experts is that the public debt will start to decrease when the first section of the highway gets completed, which corresponds with the projections of Ministry of Finance contained in the Montenegrin Fiscal Strategy, which defines a set of fiscal consolidation measures.

The report states that the rating for Montenegro could be increased if numerous projects in the field of infrastructure, energy and tourism, which are currently in progress, yield better results than expected, improving the growth prospects of Montenegro, while reducing the risks within the balance of payments.

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