15 September 2019 - The credit rating agency Standard and Poor’s recently published a new Report for Montenegro, which confirmed the previous outlook of the country that has been marked as "stable", while preserving the B + / B rating, reports Montenegrin Ministry of Finance.
Credit analysts of this agency confirmed that Montenegro is on the right track of development.
Assessing the trends in Montenegro’s economy, the Standard and Poor's emphasized the significant results achieved in the sectors of tourism and energy and the considerable inflow of Foreign Direct Investments (FDI). The strong performance of the tourism sector supported the real growth of almost 5% in 2018, which is the highest growth that Montenegro recorded in the past decade. This trend is continued in 2019 because tourist arrivals for the first six months increased by 20 % compared to the same period last year.
Significant foreign investments provide a great contribution to the rating. According to the projections of the Agency, the FDI will amount to an average of 10% of GDP per year in the next four years, and they are mainly concentrated in the real estate sector, hospitality, and the energy. The on-going projects in the hospitality sector include several high category coastal resorts and hotels for tourists with preferences in the area of mountain tourism.
At the same time, the representatives of this credit agency welcome the completion of several significant projects in the energy sector, such as the reconstruction and upgrading of power plants, the new capacities for the production of electricity and the Montenegro – Italy submarine cable that will enable Montenegro to export electricity. According to the report, the aforementioned sectors represent the base for further growth of Montenegro’s economy and the potential to boost Montenegro’s credit rating.
Furthermore, the Agency considers that the construction of the highway, as a public investment encouraged growth as well. After completion, the Government expects that the highway will connect the coast of the port of Bar and the border with Serbia, bringing together remote regions and improving road safety.
Standard and Poor's welcomes the Montenegro’s EU path as a candidate country, highlighting the important potential in the implementation of the reforms, which harmonise with the EU acquis and a large part of the population support to the EU integration, in addition to the stating that Montenegro has built relatively strong institutional frame in the regional context.
Read more about the business environment in Montenegro at TMN's dedicated page.