Montenegrin Economy Growth at 3.5% in 2019

By , 12 Jan 2019, 00:09 AM Business
Montenegrin Economy Growth at 3.5% in 2019 Copyrights: Pixabay

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10 January 2019 - The Montenegrin economy should achieve a slightly lower rate this year, due to its strong base, following the high of last year's growth, announced the Vice Governor of the Central Bank of Montenegro, Nikola Fabris.

"We forecast that the growth rate of gross domestic product in this year amounts to about 3.5 percent," Fabris said in an interview with the Mina Business Agency.

According to him, sectors that the Central Bank of Montenegro expects to be economic growth holders this year are tourism, energy, and construction, mostly by the continuation of construction of the highway, tourist and energy facilities.

‘’Also, it is realistic to expect a gradual recovery processing industry and an absolute growth of agricultural production in the function of imports substitutions," Fabris concluded.

The Ministry of Finance recently developed an Autumn analysis of macroeconomic trends and structural reforms in cooperation with other relevant institutions. The autumn analysis included economic trends and growth in the first nine months of 2018.

The World Bank and the IMF revised their projections for the countries of the Western Balkans, so the forecast for the western Balkan countries was 3.5%, while for Montenegro, the World Bank revised the projection for 2018 to 3.8% or the whole 1 pp. more than the original estimates.

The projection is that by the end of the year, the public finance deficit will amount to 135.5 million EUR (2.9% of GDP). The budget deficit will be 173.1 million EUR (3.8% of GDP), while the local government will have a surplus of 37 million EUR (0.8% of GDP).

However, the Chamber of Commerce of Montenegro recently stated that the grey economy and unfair competition are great business barriers.

“To overcome those barriers, we need to provide greater flexibility of labor market and enable the employer more space to cancel the contract of employment in case the employee fails to justify the reasons for his employment, reduce labor costs, primarily contributions thereof. That will provide higher employment, reduce the grey economy and create new jobs. It will also increase the minimum wage and consequently, reduce the unfair competition and increase the budget revenues,” pointed out Golubović.

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