EBRD raises Montenegro's 2017 GDP growth forecast to 3.7%

The forecast upgrade is mainly due to robust private consumption growth, helped to some extent by rising government consumption, while both investment and net exports had negative contributions to growth, the EBRD noted in its latest Regional Economic Prospects report.

Leading indicators, such as foreign tourist arrivals - up 20% year-on-year in the third quarter of 2017 - point to continued robust growth since mid-year, the EBRD said.

EBRD kept its 3.3% economic growth forecast for Montenegro in 2018.

"Downside risks include a possible adverse impact of the rapidly rising public debt, which may necessitate painful austerity measures in future to keep it under control," the bank added.

Montenegro's economic growth slowed to 2.9% in 2016 from 3.4% in the previous year, the EBRD said.

The EBRD expects economic growth in Southeastern Europe (SEE) to stand at 3.6% in 2017 and at 3.3% next year.