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Montenegro's fiscal deficit may reach 10% in 2020 - report

Author Radomir Ralev
Montenegro's fiscal deficit may reach 10% in 2020 - report Cruise ship in Montenegro's Kotor Bay; Source: P&O Cruises

PODGORICA (Montenegro), June 29 (SeeNews) - Montenegro's fiscal deficit may reach 10% this year, due to a drop in revenue from tourism caused by the coronavirus crisis, Montenegrin media quoted senior World Bank economist Marc Schiffbauer as saying.

The revenue from tourism which generates about 20% of Montenegro's gross domestic product (GDP) is expected to shrink by up to 50% this year, leading to a fiscal deficit of 7% to 10% of GDP, Schiffbauer said in an interview for Mina-Business news agency on Sunday.

"The final exact percentage of the deficit will depend on the effects of the current tourist season, that is, what will happen in the next few months - from July to September," Schiffbauer said.

The lockdown measures adopted by Montenegro's government contained the spread of the disease but still the income from tourism is expected to decline to 650 million ($731 million) euro from 1.3 billion euro, he added.

Last week, Montenegro's parliament adopted a 2020 budget revision proposed by the government in order to tackle the coronavirus crisis that envisages a 6.8% decline in GDP and deficit equivalent to 7.3% of GDP as a result of the coronavirus crisis. The original budget for 2020 adopted by parliament in December targeted a deficit of 50 million euro, equivalent to 0.99% of the projected GDP, and economic growth of 3.4%.

($ = 0.888878 euro)