Research Detail
| 2024/06/04 / Erste Group Research |
Growth to moderate after exceptional year(s) In 2023, the Montenegrin economy achieved the best result in Europe by expanding 6% y/y in real terms. Growth was driven by consumption, which was supported by favorable labor market cycle, strong tourism performance, and temporary immigration. Outlook suggest growth figures will moderate and fluctuate between 3%-4% in the upcoming period. Tourism has little to no spare capacity in the key peak of the season, while no new positive net migrations are expected, hence, consumption as the key engine of growth is also expected to slow. Inflation eased to 4.3% y/y at the end of 2023, but disinflation in 1Q24 has been a bit slower than expected, with March figure showing acceleration to 5.5% y/y. Risks are tilted to the upside due to possible second round of minimum wage hikes. Public debt fell to 60.3% of GDP in 2023 driven by strong economic growth as well as use of deposits that were accumulated in previous years. Following a successfully placed Eurobond (USD 750mn) in March, public debt is expected to gradually rise. EU membership remains the key foreign integration goal, hence the June assessment report is eagerly anticipated. Meanwhile, on the local scene tensions are again elevated after the vote in the UN regarding Srebrenica resolution. |
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General information
| Author | Erste Group Research |
| Date | 2024/06/04 |
| Language |  |
| Product name | CEE Country Macro Outlook |
| Topic in focus | FX, Macro/ Fixed income |
| Economy in focus | - |
| Currency in focus | - |
| Sector in focus | - |
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