IMF Sees Montenegro Economy Slowing

The International Monetary Fund says Montenegro’s economy, one of the fastest growing in Europe, will slowdown dramatically next year amid the global financial crisis.

An IMF official said Montenegro’s growth rate in 2009 could slide to only 2 percent, way down on the 8 percent expected this year, because of the expected slowdown of foreign investments.

However, the IMF’s mission chief in Montenegro Daniel Kanda said the tiny state of only 650,000 has not asked for any help from the fund.

“Despite the expected slowdown in growth and deteriorating fiscal position, the government of Montenegro has not asked for any IMF financial support”, he said.

Montenegro, which split from Serbia in a referendum in 2006, has since experienced a real estate boom, with its economy thriving mostly on Russian and British investments into the tourism industry.

According to the country’s central bank, Montenegro’s GDP’s growth in 2006 was 8.6 percent and in 2007 it reached 10,7 percent. The government expected a 8 percent growth this year.

“The GDP growth rates at about 10 percent are not likely to repeat any more,” Kanda said after an IMF mission met with Montenegro officials to assess the Balkan state’s economy and possible credit needs.

He said the IMF expected “a modest revival after the (global financial) crisis ends.”
Kanda also expressed concern over the planned tax cuts by the government, seen as fueling the budget deficit.

“Our forecast is for a considerable fiscal deficit in 2009,” Kanda said, adding that the government measures to cut taxes as of January next year would keep on fueling the gap

Source: Balkan Insight

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Posted by editor on Dec 17 2008. Filed under Economy, Region, Tourism. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry