20 December 2018 - The Ministry of Finance developed an Autumn analysis of macroeconomic trends and structural reforms in cooperation with other relevant institutions. The autumn analysis included economic trends and growth in the first nine months of 2018.
"The environment is characterised by a moderate and less balanced growth of the world economy," said Iva Vuković, Director General for Economic and Development Policy at the Ministry of Finance, adding that these trends are significantly influenced by rising geopolitical tensions, trade restrictions between the USA and China, and the rise in crude oil prices on the world market.
The World Bank and the IMF revised their projections for the countries of the Western Balkans, so the forecast for the western Balkan countries was 3.5%, while for Montenegro, the Workl Bank revised the projection for 2018 to 3.8%, or the whole 1 pp. more than the original estimates.
Director General Iva Vuković said that in 2017 the level of investments was worth 1.1 billion EUR, and that according to the latest government projections, this level of investment should be close to 1.5 billion EUR at the end of this year and that the achieved results of economic growth were also contributed by excellent tourism revenues, which grew by 8.3% in the first nine months, thus reaching the level of tourism income realised during the whole year of 2017; tourism revenues in 2018 are projected to exceed 1 billion EUR.
"I would also stress industrial production's growth of 24% and a significant increase in electricity based on favourable hydrological conditions and new capacities", she pointed out.
Positive trends in economic teems also reflected the movement of indicators in the labour market and the latest available data for 9 months indicate that the labour activity rate has risen to 57.6%.
Employment grew at a rate of 3.1%, while the unemployment rate was further reduced to 14.1%.
"The current account deficit has grown by 32% and is a consequence of foreign trade deficit and reduced surplus of primary incomes. The trade deficit amounted to 1.5 billion EUR, while we had a surplus of services that grew by 11.2%. Net exports are negative, but we expect a strong impact on tourism and metal exports to reduce the negative contribution of net exports to real GDP growth. According to government projections, the current account deficit will amount to 18.1% of GDP at the end of this year, which is 2$ more than in 2017," Director General Vuković said.
The projection is that by the end of the year, the public finance deficit will amount to 135.5 million EUR (2.9% of GDP). The budget deficit will be 173.1 million EUR (3.8% of GDP), while the local government will have a surplus of 37 million EUR (0.8% of GDP).
Public debt at the end of 2018 will amount to 3.2 billion EUR, or 70.9% of GDP, while the state debt will total 3.1 billion EUR, or 68% of GDP.
"Priorities in the coming period remain the dynamisation of economic growth and the strengthening of the competitiveness of the economy, the continuation of the implementation of projects in all areas, implementation of measures from the fiscal strategy in order to maintain the stability of public finance and further implementation of measures and policies with the aim of attracting investment and job creation and growth earnings in the private sector," Vuković concluded.
