Montenegro's GDP To Grow 7.0% in 2009, Inflation Seen Slowing to 4.5% - Fin Min

No projections were immediately available for 2008. Montenegro's gross domestic product (GDP) grew by a real 8.0% in the first nine months of 2008, above the government's target of 7.0%, the cabinet said last month. Consumer prices grew by 6.5% in September compared to December 2007, according to latest data from the statistics office.

“The nominal value of GDP in 2009 is estimated at 3.463 billion euro ($4.440 billion), which represents a nominal growth of 14.5% compared to the [expected] GDP in 2008 (3.025 billion euro). Real growth is estimated at 7.0%," the Finance Ministry said in a statement sent to SeeNews.

"In 2009, a softening of the inflationary tendencies is expected, and the estimated inflation rate is 4.5%,” it added.

In 2007, Montenegro's GDP rose by a real 7.0% to 2.278 billion euro and the consumer price index rose by a cumulative 4.2%.

In its draft budget for 2009 Montenegro plans a total budget revenue of 1,565.12 million euro (45.10% of GDP), 15.84% higher than the revenue projected for this year, the statement said. Total spending is seen at 1,613.51 million euro (46.59% of GDP), 22.07% higher than the planned expenditure for 2008.

The government expects the largest share of revenue to come from taxes and social security and health contributions, or 28.07% and 10.78% of GDP, respectively.

Last week Finance Minister Igor Luksic said the 2009 budget draft envisages a significant rise in public spending on infrastructure and other projects to 6.5% of GDP, as a means to weather the effects of the global financial crisis. He also said that Montenegro’s economy should be able to avoid slowdown, as private investments are expected to reach 10% to 12% of GDP.

($ = 0.7799 euro)