Montenegro Lowers 2009 GDP Growth Target to 5.0% from 7.0% - Govt Official

“We expect a nominal gross domestic product of 3.715 billion euro ($5.229 billion) next year,” Deputy Prime Minister in charge of economic policy Vujica Lazovic told a news conference on Thursday after the government had adopted its 2009 economic blueprint.

The International Monetary Fund said earlier this month that Montenegro’s economic growth will slow down to around 2.0% in each of the next two years as the global outlook darkens.

Lazovic said that despite the crisis the government expects an infrastructure boom in 2009 and has extended its capital budget by an annual 164% to 225 million euro for next year. He was referring to the ongoing tender for a 2.0 billion euro motorway that will link the country with a major European Union-defined transport corridor, as well as to the tenders currently in progress for hydro power plants and projects in the tourism sector.

Montenegro's GDP grew by a real 8.0% in the first nine months of 2008, and the country’s central bank has said it expects the annual growth to be clocked at 9.0% by the end of the year.

Lazovic also said one of the positive effects of the crisis will be a smaller trade deficit of 1.52 billion euro, or 31% of GDP, in 2009 compared to the 1.198 billion gap, or 35% of GDP, expected at the end of this year.

The government expects foreign direct investments to fall to 460 million euro, or 12.4% of GDP, in 2009 from 550 million euro in 2008.

The projected inflation for next year remains at 4.5%, as announced in November, as the crisis is expected to ease inflationary pressures.

Montenegro's November consumer prices were 6.2% higher than a year earlier after rising by 7.4% year-on-year in October, data from the country's statistics office showed.

Lazovic said the unemployment rate is expected to be just a tad lower next year, at 10.3%, while employment growth will slow down to 2.1% from this year’s 6.1%.

Montenegro’s 2009 foreign debt is projected at 710 million euro, or 19.1% of the GDP, Lazovic added.

($=0.7105 euro)