The credit rating agency Standard & Poor’s (S&P) has confirmed the stable prospects of Montenegro, while retaining the BB rating, the Ministry of Finance announced.
“The report of the S&P agency states that an improvement in the rating of Montenegro could occur in the case of faster fiscal consolidation, along with the expansion of the economic base, which would strengthen the resistance to external shocks.” In such a scenario, the expectations are that the net public debt will potentially be below 60 percent of the gross domestic product (GDP), with the realization of a primary surplus,” the statement said.
The stable outlook, as it is added, reflects the expectations of the rating agency, that the economic growth of Montenegro will continue to be supported by the growth in the tourism sector, which was maintained even during the war in Ukraine.
“It is also expected that the fiscal deficit and balance of payments risks will remain under control, as well as that economic external financing channels will remain open for all remaining financial needs that are met by domestic banks or international financial institutions (IFIs),” the ministry said.
In the report of this credit agency, it is forecasted that the real GDP growth rate of Montenegro will be reduced to 3.2 percent this year, after a growth of six percent last year.
“It is also forecast that, thanks to strong revenue growth, the general government deficit will decrease to 3.2 percent of GDP this year, from 5.2 percent of GDP last year,” the statement said.
The assessment is that the Montenegrin tourism sector successfully recovered after the pandemic, and the number of tourists, for the period from January to June, amounted to 580,000, which is 14.9 percent more compared to the same period in the record year 2019.
“The expectations are that the Montenegrin economy will continue to attract foreign direct investments (FDI) of about ten percent of GDP per year in the medium term,” the ministry added.
The confirmation of the credit rating, despite all the global uncertainties, is proof that the Ministry of Finance leads a responsible and adequate financial and fiscal policy, due to very complex and challenging economic and political external and domestic circumstances.
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