January 24 (SeeNews) - Montenegro's economic growth is expected to slow to 3.0% in 2018 from 4.0% last year, due to the low contribution of private and public consumption, French credit insurance agency Coface said.
Although lower, growth is expected to remain comfortable in 2018, continuing to be driven by investment, Coface said in its Country and Sector Risks 2018 report.
The investment will be supported notably by the continued construction of the 41 km long first section of the Bar-Boljare motorway, which will eventually link Bar port to Boljare, on the border with Serbia, Coface said.
"Foreign investment in tourism infrastructure is set to continue, further developing a sector that already contributes 10% to GDP."
The contribution of foreign trade will be negative due to the increase of imports related to the construction of the motorway, Coface said.
The country's budget deficit is expected to narrow to 4.0% of GDP in 2018 from 6.0% of GDP last year, while average annual inflation is expected to quicken to 2.6% from 2.4%, the credit insurance agency noted.
Public debt is projected to rise from 74% of the country's GDP in 2017 to 78% in 2018.
Corporate life is complicated by corruption, the politicisation of the legal system, organised crime, an inaccurate land register, and slow administrative procedures. However, EU accession negotiations are leading to improvements in the business climate, Coface said.