Business Environment Macroeconomic Outlook Capital Market Banking Sector Privatization and Investments Economic Freedom Business News In the Spotlight Coming up...
Business News Promotion of Domestic Products It was stated by the Montenegro Business Alliance that there should be a focus on the stimulation of the development of the food sector. The Alliance stated that this should be achieved by supporting domestic production and by stimulating chains of shops to increase their export of domestic products. Ultimately this is necessary in order to increase the competitivety of Montenegrin food companies. In addition to the above, it is also improtant to encourage consumers to develop the habit of purchasing domestic products in Montenegro. The managerial and marketing services of companies in the food sector are the most responsible for achieveing this, but the awareness of Montenegrin consumers could also help to develop the domestic economy by purchasing domestic products.
Montenegro Dedicated to the Open Market Montenegro is dedicated to the open market and the private sector as the drivers of economic growth and development. When opening the 2nd Forum of Mediterranean countries, it was stated that Montenegro is going in the direction of reducing taxes and customs tariffs, proportional tax, the free flow of goods and capital. The title of this year’s forum was “The Development of International Networks”. This highlighted the fact that Montenegro has already changed a part of its legislation by achieving its goal of removing certain provisions that could have been seen as business barriers.
Prices in Montenegro are Slightly Lower The average prices of goods and services for personal consumption in Montenegro were 0.1 percent lower in May than they were in April. Consumer prices increased by 3.6 % in comparison with May 2010, and by 3.1 % in comparison with December 2010. In the main groups of products and services, an increase was recorded in the price of clothes and shoes (0.2 %), alcoholic beverages and tobacco products (0.1 %), restaurants and hotels (0.1 %), while a decrease was recorded in healthcare (1.2 %), transport (0.7 %), culture (0.4 %), furniture and housing equipment (0.3 %) and education (0.1 %).
Increase in Foreign Trade by 19% Total foreign trade in Montenegro, during the period from the beginning of 2011 to May of the same year, amounted to €837.6 million, which was an increase of 19% in comparison with the same period last year. The total value of exported goods was €180.5 million, which was 53.2 percent more than it had been in 2010, while the value of imported goods was €657.1 million, an increase of 12.2 % compared with the first five months of last year.
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The export-import ratio amounted to 27.5% and was bigger than the ratio that had been recorded during the same period last year, which amounted to 20.1 %.
Terna Publishes the Details of the Contract on Underwater Cable The Italian company, Terna, gave its approval to publish the details of a contract concerning the construction project of an underwater cable from Montenegro to Italy. Terna expressed that it was ready to give its approval to publish parts of the contract, emphasizing that the legislation and practices required by the European Union ensured, in the main, the confidentiality of these types of contracts and their content. The contract regarding the construction of the underwater cable from Tivat to Pescara was signed in November 2010 and is worth around €720 million.
Employers are worried about the state in Montenegrin economy
It was assessed by the Employers Federation of Montenegro that the situation is concerning in economy. The business environment is bad and planned investments should be realized in due course. The unemployment rate in Montenegro is 11 percent, and employers were very active in 2011 and employed 2.5 percent more workers than last year. The odd thing is that there are 30.000 unemployed in the records of Montenegrin Employment Office, while there are 12.000 foreigners who are working in the country.
World Bank Agrees on €59.1 million for 20 year Loan to Montenegro The World Bank agreed a €59.1 million loan to Montenegro for budget support and banking system reform. The World Bank’s board of directors is expected to give final approval for the loan at the end of August or at the beginning of September.
August 2011
Investment-Development Fund Approved 37 New Projects The Board of Directors of the Investment-Development Fund of Montenegro reached a decision regarding financing 37 projects of small and medium-sized companies, to the amount of €2,801,500. The share of responsibility taken by the Investment-Development Fund for financing these projects is €2,566,000. Commercial banks are responsible for the remaining €235,500. In projects from the production sector, food production and service activities dominate – they account for more than 70 % of the total number of approved projects. The InvestmentDevelopment Fund has identified 14 projects that will be realized in the north of Montenegro, and has also agreed to contribute to reducing presently existing regional differences.
Agreement on Air Traffic with Switzerland The Ministry of Transport and Maritime Affairs of Montenegro is negotiating with several low-cost airline companies that are interested in Montenegro. By September, they will make an announcement to disclose their decision regarding whether there will be any new flights and when these new operations would start. The Minister of Transport signed an agreement on air traffic between Montenegro and Switzerland with the Swiss Ambassador. The Swiss Ambassador stated that tourists from his country are not interested in whether or not Montenegro has low-cost flights, but are rather interested in the quality of services provided by Montenegro.
Montenegro Changes the Motorway Project With the support of the European Investment Bank, the Montenegrin government will apply for technical and consulting help from the Western Balkans Investment Framework in order to realize the construction project concerning the Bar-Boljare motorway. Montenegro will make a request for funds for technical aid, and in December 2011 the EU and the international financial institutions will decide on the selection of a consultant to start auditing the project in 2012. The consultant should finish the job within 3 to 6 months, after which time a recommendation will be made to the Montenegrin government regarding how to start a new tender process.
Construction of a Second Montenegrin Ship Started in Shanghai The construction of a second Montenegrin ship has started in Shanghai. The delivery of the first ship is planned in December 2011, and the second ship is expected to be delivered in March 2012. The Montenegrin Ministry of Transport and Maritime Affairs stated that the amount of the loan that has been granted is $47.396 million. There is a repayment deadline of 15 years, a grace period of 5 years and fixed interest rate of 3 %. The two ships are identical transoceanic ships that are intended for the transport of bulk cargo. The ships were purchased at almost half the usual price, when compared with the previous year’s prices - $27.88 million per ship.
The Chamber Assembly on the functioning of economy in the first quarter, with special emphasis on liquidity The main topic discussed at the session of the Chamber of Economy of Montenegro’s Assembly was functioning of the economy for the period January - June 2011 with the particular emphasis on liquidity and disturbed debtor-creditor relations in commercial business recalling that this is not just a problem of our economy, but also of the countries that are members of the European Union, for which reason the European Parliament in February this year adopted the Directive on prevention of late payments in commercial transactions. At the meetings, the businessmen have pointed out to the need for urgent addressing of this problem. They proposed introduction of multilateral compensation, ensuring more favorable loans, deferred payment of VAT, reducing taxes and contributions on income, introduction of new financial methods and instruments of collection of receivables, such as extrajudicial collection through specialized agencies, factoring and forfeiting.
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