August 2011
Macroeconomic Outlook GDP According to estimates for 2011, made by the Ministry of Finance in Montenegro, GDP is expected to reach a level of €3.192 billion along with a real growth rate of 2.5%. Similar projections have also been made by the European Commission. These projections indicate that the growth in economic activity is expected, not only on the basis of improved consumer confidence, but also on the basis of growth in the area of exports. The projections are also made upon the assumptions that full capacity will be achieved by the metals industry and that aluminum prices will remain at the same level in global markets. Despite a weak first half of the year, we should be able to expect annual real GDP growth to be above 2% in 2011. Source: (Ministry of Finance)
Industrial Production Industrial output dropped by 9.1 % during the period January-May 2011 in comparison with the same period last year. This fall was caused by a fall in output in the electricity, gas and water sectors, which dropped by 27.8% during the observed period. Growth in the mining and quarrying industries, along with growth in the manufacturing industry sector (7.6 % and 11.4% respectively) was not sufficient to compesate for the decreases that were seen in the electricity, gas and water sectors.
Business Environment Macroeconomic Outlook Capital Market Banking Sector Privatization and Investments Economic Freedom Business News In the Spotlight Coming up... Graphic 1. GDP in 2011 (I - VII) 2011… 2010… 2009* 2008* 2007* 2006* 2005* 2004* 2003* 2002* 2001* 2000*
3.192,0 3.025,0 2.981,0 3.085,6 2.680,5 2.149,0 1.815,0 1.669,8 1.510,1 1.360,4 1.295,1 1.065,7
0,0
500,0
1.000,0 1.500,0 2.000,0 2.500,0 3.000,0
* MONSTAT ** Estimates made by Ministry of Finance
Source: (Monstat)
Budget According to preliminary data from the Ministry of Finance, revenue from the Montenegrin budget and state funds amounted to € 268.8 million. Current revenue in April amounted to € 89.5 million or 2.8% of the projected GDP, while revenue from borrowing and loans from foreign sources amounted to € 179 million, and from privatisations and donations to € 0.3 million. Current revenue was 1.7% lower than expected, and in relation to April 2010, it had decreased by 3.1%. Budget expenditure amounted to € 100.4 million or 3.1% of GDP in April 2011 and it was 4.6% higher as compared to the same period in 2010. Thus, in April 2011, the Montenegrin budget recorded a deficit of 10.9% (0.3% of GDP). Source: (The Ministry of Finance)
Inflation The average annual rate of inflation, as measured by the Consumer Price Index (CPI), in January-May 2011, was at level of 2.8%. During the observed period, the rise in inflation was mostly due to price increases related to certain products/services, particulary alchoholic beverages and tobacco (9.8%), health care (10.4%) and transportation (8.4%). According to available data providing comparisons at an international level, the level of inflation rate in Montenegro (January-April 2011) amounted to 3.7%, while in the Europe Union (EU 27, EU15) was at level of 3.2%, and 2.8% respectively. Source: (Monstat, Central Bank of Montenegro)
Employment and Wages In May 2011, the gross average salary amounted to € 714, whilst the average salary without taxes and contributions amounted to € 479. In January-May 2011, the average salary without taxes and contributions showed a rise of 4.7% in comparison with the same period last year. This was, mostly due to increases in the manufacturing sector and in the wholesale and retail trade sectors. However, looking at the monthly salary level, the average salary (without taxes and contributions) fell slightly during the first quarter, and this trend also continued during the second quarter (January € 518, February € 506, March € 484, April € 473) Source: (Monstat, The Employment Agency of Montenegro)
Foreign Direct Investments (FDI) According to preliminary data, net FDI inflow amounted to € 170 million during the period January-May 2011, and was 16% lower in comparison with the same period in 2010. Total FDI inflow amounted to € 163 million, while outflow was recorded at € 18 million. Of the total FDI inflow, equity investments amounted to € 115 million, while inflow in the form of intercompany debt amounted to € 38 million. In the structure of equity investments, investments in companies and banks made up 44.5% of the total inflow, while investments in the real estate sector accounted for 26%. Graphic 2. Average salary without taxes and contributions May-11 Apr-11 Mart-11 Feb-11 Jan-11 Dec-10 Nov-10 Oct-10 Sept-10 Aug-10 July-10 Jun-10 May-10
EUR 479 EUR 473 EUR 484 EUR 506 EUR 518 EUR 515 EUR 480 EUR 477 EUR 481 EUR 504 EUR 466 EUR 473 EUR 487 440
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