Montenegro`s economy recorded a high rate of growth of 5.1% in 2018 and these positive developments continued throughout 2019.

According to preliminary Monstat data, the year-on-year GDP growth in Q1 and Q2 of the current year reached 3.0% and 3.2%, respectively. It is estimated that the 2019 growth will be 3.2%.

In September this year, the CPI inflation in Montenegro was negative in relation to the same month in 2018, and it amounted to -0.2%. At the same time, consumer prices rose 0.4% compared to December 2018.

Industrial production dropped 8.1% in the first nine months this year in relation to the comparative period in 2018.

Production increased in manufacturing industry, 5%, and in electricity, gas and steam supply, 16.8%, whereas the mining and quarrying sector output rose 16.1%.

During the reporting period, construction recorded the year-on-year increase in the value of executed construction works of 18.7%, and a 6.2% increase in the effective working hours.

Forestry saw a production decline of 16.3%1 y-o-y.

The number of tourist arrivals in collective accommodation establishments was 1.1 million, which is the year-on-year increase of 16.4%. In total, 4.2 million tourist overnights were recorded, which was 9.5% more than a year ago.

Preliminary Monstat data reveals that in the first nine months of 2018, air passenger transport recorded the year-on-year growth of 7% in the number of passengers at airports, while air freight transport decreased by 8.9%.

Over the same period, railway passenger transport decreased by 0.1% while railway freight transport rose 10.5%. Road passenger transport rose 1%, while road cargo transport was 10.2% higher y-o-y.

The banking sector was sound and stable, with banks recording profit, high liquidity, and solvency. At end-September 2019, non-performing loans (excluding interests and prepayments and accruals) amounted to 141.8 million euros and accounted for 4.7% of total loans. The share of non-performing loans (NPLs) in total loans declined by 2.04 percentage points y-o-y. During the first nine months of the current year, three banks were capitalized in the total amount of 48 million euros. This is presented in the weighted index, while if presented in the non-weighted index, the output was 14% lower in the same period. The weighted average lending interest rate on total loans continued its downtrend from September 2014 (9.57%), dropping down to 6.17% in September 2019. Compared to December and September 2018, the weighted average effective lending interest rate was 0.19 and 0.23 percentage points lower, respectively.

During Q3 2019, the CBCG published new statistics on leasing companies. To wit, in line with the Decision on Financial Services Providers` reporting to the Central Bank of Montenegro, and also according to the monetary statistics methodology for compiling statistics of other financial institutions, statistical data of leasing companies are published on the CBCG`s website on quarterly basis.

The fiscal deficit in the January-September 2019 amounted to 38.4 million euros or 0.8% of GDP.

According to the Ministry of Finance data, at the end of September 2019, the (gross) government debt of Montenegro amounted to 3,127.9 million euros or 64.9% of GDP. Of this amount, domestic debt accounted for 504.5 million euros or 10.5% of GDP, while external debt accounted for 2,623.4 million euros or 54.4% of GDP. Net government debt amounted to 61,6% of GDP.

Preliminary data indicate that the current account deficit amounted to 405.8 million euros in the first nine months of the current year, being 3% lower y-o-y. This decline is a result of the growing surplus in the services and secondary income accounts. Deficit in the goods account reached 1.6 billion euros or 2.4% more y-o-y due to a higher absolute growth in visible imports over visible exports. Total visible exports amounted to 336.2 million euros, showing an increase of 6.5% y-o-y. The growth was mainly due to an increase in the export of miscellaneous manufactured articles, electricity, metalliferous ores and metal scrap, cork and wood, and road vehicles. Total visible imports amounted to 1.9 billion euros and it was 3.1% higher than in the comparative period last year, primarily due to an increase in the import of electricity, medical and pharmaceutical products, furniture and parts, machinery specialized for particular industries, and general industrial machinery and equipment. In the observed period, the services account ran a surplus of 960 million euros or 7% more than recorded in the same period of 2018. Total revenue from services amounted to 1.5 billion euros or 9.8% more than in the period January - September 2018, while the expenditure for services amounted to 501.4 million euros or 15.6 more.

Net FDI inflow reached 266.7 million euros in the reporting period, which is a 22.5% increase y-o-y. Total FDI inflow amounted to 591.7 million euros, being almost at the same level as in the comparative period last year, but FDI outflow recorded a decline of 12.3%.

The average number of employees amounted to 205,650 in September 2019, which is 5% more y-o-y and 6% more compared to December 2018. At the same time, the number of unemployed people stood at 33.675, which represents a 15.6% decline year-on-year and 18.6% decrease compared to the same month a year ago. According to the Employment Agency, the unemployment rate amounted to 14.51% which is 2.69 percentage points lower than the rate recorded in September 2018. An average gross salary amounted to 771 euros in the first nine months of the current year, while an average salary without taxes and contributions totalled 514 euros or 0.8% more than the averages recorded in the comparative period last year.

Source: Central bank of Montenegro

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