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EBRD maintains Montenegro's 2019 GDP growth forecast at 2.8%

Author Radomir Ralev
EBRD maintains Montenegro's 2019 GDP growth forecast at 2.8% License: Creative Commons BY-NC 2.0

PODGORICA (Montenegro), November 6 (SeeNews) - The European Bank for Reconstruction and Development (EBRD) said on Wednesday it is leaving unchanged its May projection for Montenegro's 2019 economic growth at 2.8%.

"With the completion of large investment projects and ongoing fiscal consolidation, growth is projected to moderate significantly, to 2.8% in 2019 and 2.6% in 2020," the bank said in its November 2019 Regional Economic Prospects report.

"However, private investment in tourism and energy is likely to stay high. The risks to the projections mainly relate to weaker growth in the European Union," the bank said.

Montenegro's gross domestic product (GDP) increased by 5.1% last year, quickening from 4.7% in 2017.

"The economy’s growth rate has slowed in 2019. In the first half of the year, GDP growth fell to 3.1% year on year, from 5.1% in 2018. The deceleration is primarily due to large investment projects (the Bar-Boljare highway and the power link to Italy) approaching completion," the EBRD noted.

Montenegro's current account deficit is expected to remain large and at a similar level to that seen in 2018, at around 17% of GDP.

Regarding the region of Southeast Europe (SEE), the EBRD has lifted its 2019 economic growth forecast to 3.3% from 3.0% predicted in May, following a slowdown to 3.4% in 2018 from 4.3% in 2017. In 2020, growth in the SEE region is also seen at 3.0%.

The SEE region in the EBRD's report comprises Bulgaria, Cyprus, Greece, Romania, Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia and Serbia.