PODGORICA (Montenegro), May 14 (SeeNews) – The European Bank for Reconstruction and Development (EBRD) said on Wednesday it raised its forecast for Montenegro's 2014 economic growth to 3.0% from 2.0% projected earlier.
The economic growth in 2014 is forecast at 3.0%, on account of the improvements in external demand, as well as the progress in several major infrastructure projects, but downside risks remain large, the EBRD said in its Regional Economic Prospects Report.
In 2015, the EBRD expects Montenegro's gross domestic product (GDP) to grow by 2.5%,
Montenegro’s economic activity picked up in 2013 on the back of strong growth in electricity production and a good tourism season, the EBRD said
However, the current account deficit at 15% of the GDP remains the highest in the region.
In addition, Montenegro's fiscal position has been weakened by the activation of state loan guarantees related to aluminium company, KAP, which raised the budget deficit. Consequently, the public debt has further risen, and now it stands just below 60%, a 10 percentage point increase relative to 2011, it said.