September 28 (SeeNews) - The European Bank for Reconstruction and Development (EBRD) expects Montenegro's economy to grow by 3.7% in 2022, affirming its forecast made in May, it said on Thursday.
Montenegro's economic growth is expected to speed up to 4.0% in 2023, the EBRD said in its latest Regional Economic Prospects report.
"There is major uncertainty around the outlook. Key risks to the outlook include elevated inflation and political instability, both of which may delay public investment and reform efforts," the EBRD said.
Inflation, as elsewhere, has been elevated in Montenegro during 2022 on the back of surging global food and energy prices, and exacerbated by high wage growth, while policy responses were delayed until a new government was formed in April 2022, after which VAT on cooking oil and flour was temporarily cut and excise duty on fuel was halved, the EBRD noted.
The economic output of the EBRD's region of Western Balkans, which comprises Albania, Bosnia and Herzegovina, Kosovo, North Macedonia, Montenegro and Serbia, is seen rising 3.2% in 2022 before expanding 3.0% in 2023.