A recent survey by the Central Bank of Montenegro (CBCG) reveals significant obstacles to new investments, primarily driven by underutilization of existing capacities, high interest rates and unfavorable conditions for capital borrowing.
The CBCG’s report on price trends for the second quarter indicates that 58.93% of surveyed companies plan to expand their activities by year-end, while 41.07% expect to maintain their current level of operations.
Moreover, 63.16% of respondents expressed intentions to make new investments, mainly focused on increasing fixed assets. However, many identified general business risks (29.29%) and a lack of skilled labor (23.23%) as key barriers to growth.
Other challenges include high taxes and fees (14.14%), elevated loan interest rates (11.11%), market competition (10.10%), low pricing (5.05%), various other barriers (4.04%) and weak demand (3.03%).
The survey also found that 47.54% of companies expect interest rates to remain unchanged compared to last year, while 27.87% anticipate a decrease and 24.59% foresee an increase.
In terms of inflation expectations, an August survey indicated that nine banks expect a decline in inflation, while one anticipates an increase and another expects stability compared to the previous year.
Regarding specific inflation forecasts, six banks predict rates between 3% and 6%, five banks estimate a range between 6% and 9%, while none expect inflation to fall below 3% or rise above 9%.
Among the surveyed companies, 50.85% anticipate inflation to be between 3% and 6% this year, with 28.81% forecasting a range of 6% to 9%. Additionally, 15.25% expect inflation to exceed 9%, while 5.08% foresee rates between 0% and 3%.
