PODGORICA (Montenegro), April 4 (SeeNews) – Montenegro's finance ministry said on Wednesday that ratings agency Moody's affirmed the country's B1 credit rating and stable outlook, voicing support for the implementation of economic reforms.
The Montenegrin credit profile is characterised by relatively high potential in comparison with similarly rated countries, chiefly due to the investments in the field of tourism and energy that stimulate economic growth and alleviate external pressures, the finance ministry said in a statement, quoting a credit opinion report issued by Moody's on Tuesday.
Montenegro's credit potential is also reinforced by the prospect of joining the European Union, accompanied by the strengthening of institutions, as well as membership in the NATO alliance. Analysts also expect that mid-term fiscal consolidation measures introduced by the government will lead to easing the growth of public debt and stabilising Montenegro's fiscal position in the next two years, the finance ministry said.
According to the report, the stable outlook is supported by a moderate institutional and fiscal strength, as well as a moderate susceptibility to risk, despite the fiscal impact of the Bar-Boljare motorway construction project.
Credit analysts estimate Montenegro's gross domestic product (GDP) growth at 4.3% in 2017, thanks to a good tourist season and ongoing infrastructure projects. Moreover, the employment growth quickened to 2.5% in 2017, while unemployment rate fell to 16.1%, and wages increased by 2%.
The fiscal consolidation measures, debt reduction, progress in EU negotiations, and a decline in the volume of contingent liabilities arising from government guarantees will continue to have a positive impact on Montenegro's credit prospects in the forthcoming period, Moody's said.
Moody's said in October it changed the outlook on Montenegro's B1 long-term issuer and senior unsecured debt ratings to stable from negative. The key drivers of the upgrade are the Montenegrin government's consolidation measures, the large investment projects in transportation, tourism and energy, as well as the progress in EU accession negotiations and the country's NATO membership, Moody's said at the time.