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PODGORICA (Montenegro), January 10 (SeeNews) - The World Bank said it has lowered its projection for Montenegro’s economic growth to 2.8% in 2018, from 3.0% projected in June.
The forecast for Montenegro’s economic growth in 2019 was reduced by 0.2 p.p. to 2.5%, the World Bank said in its January 2018 Global Economic Prospects report.
The bank estimates Montenegro's economic growth in 2020 at 2.1%.
Social assistance programmes in Montenegro and a high marginal effective tax rate for earnings below social assistance levels create disincentives for people to transition from informal to formal sector jobs, the World Bank said in November.
The combination of the two factors discourages people from taking up part-time, temporary, and seasonal jobs in the formal economy, the World Bank said in its report The Western Balkans : Revving Up the Engines of Growth and Prosperity.
Montenegro's economy expanded by 4.2% last year, according to the World Bank estimate in the report. In June, the World Bank estimated 3.3% economic growth in 2017.