18 April 2019 - Credit rating agency Moody's confirmed in its new report the assessment of the credit rating B1 for Montenegro while retaining a "positive" outlook. The last available credit rating for Montenegro was also B1.
This credit rating is primarily due to the high GDP growth per capita, the institutional strengthening supported by the perspective of EU accession, attractiveness for foreign direct investment, as well as significant investment projects in transport, tourism, and energy. In parallel, the positive outlook with the B1 rating reflects the favourable mid-term prospects of the country, supported by adequate structural reforms, as well as the consolidation measures the Government has continuously implemented, which contribute to strengthening the fiscal position of Montenegro. Furthermore, the Government has taken adequate measures to reduce the risk of medium-term debt refinancing significantly.
The report states that the growth of GDP in 2018 of 4.9% was primarily driven by investments, but also another year of a record-breaking tourist season. In addition, positive trends in the labour market supported growth in household consumption, with an increase in employment, while the FDI inflow was slightly lower than in the previous year, but with a still high 9% of GDP.
According to the Report, the weaker global economic outlook will contribute to lower growth rates. Despite this, Montenegro foresees a healthy business cycle, with growth rates at 3.0% in 2019 and 3.2% in 2020, that is, above the 10-year historical average of 1.9%.
As a major backbone of the future development of Montenegro and further improvement of the credit rating, it is stated that strengthening of the competitive position will be achieved through the implementation of projects in the sectors of tourism and energy, as well as mitigation of external risks.
In this year's report, Moody's has highlighted that Montenegro is the forerunner in the process of EU accession among the Balkan countries, which represents a further impetus for the improvement of the rule of law and institutional capacities in the coming years. Since the start of EU accession talks in June 2012, Montenegro has opened 32 out of the 33 negotiating chapters and has three temporarily closed chapters.