Projections of World Bank WB predict that Montenegrin economy will have a yearly growth of 2,8% by 2019, although the growth is currently based on an unsustainable model.
WB said that, although positive, medium-term projections for Montenegro still carry significant risks.
„Sensitivity to external shocks is set to grow. Decrease of public investments will decrease the total growth, exposing Montenegro to further risks”, WB report reads.
In the report for Western Balkan titled Faster growth, higher employment, it is stated that Montenegro will need additional measures for decreasing of expenditures and increasing of revenues. Recent program of consolidation represents a step forward.
„Big fiscal deficit and growing public debt show that public finances are an unsustainable path”, the report reads.
It would not be easy to decrease deficit, WB believes, but its urgent, keeping in mind the need to build trust in the market.
„This year predicts the deficit of 6,6% of GDP, despite already adopted measures of consolidation of 3,2% GDP”, WB stated.
Although recent increase in social welfare reimbursements will contribute to short-term decrease of poverty, it also increases economic sensitivity.
The stabilization of Montenegro’s debt will be a challenge, but will also hold key significance in rebuilding trust of investors and successful payment of state’s litigations.
WB estimates that GDP of Montenegro decreased for 2,1% in the last year.
„The investments had a strong role, especially in the energy sector, regardless of tardiness in obtaining construction permits for highway Bar-Boljare”, the report concludes.
