25 November 2020
  • 10:36 Teleworking is an opportunity for Slovenia’s companies in foreign markets
  • 10:14 Hot topics: Montenegro’s economy hit hardest by the health crisis; Serbia to get new government
  • 10:50 Great minds of Western Balkans
  • 13:24 NLB is the First Bank in Slovenia to Sign the Global UN Principles for Responsible Banking
  • 10:53 EBRD’s chief economist to speak at the export conference in Ljubljana
Author:  Ana Potočnik

Montenegro’s economy hit hardest by the health crisis

Montenegro is listed in the International Monetary Fund (IMF) report on world economic forecasts as the country with the largest decline in GDP in the Western Balkans and the second largest decline in Europe, ranking immediately after Spain. A recent World Bank analysis predicts the deepest recession in Montenegro in decades with the country facing a long and difficult recovery.

 

The Montenegrin economy will weaken by 12% this year. The IMF revised its spring estimate, which predicted a 9% drop in Montenegro’s GDP that assumed tourist visits would be possible from July, but this did not happen, as tourism was only partially made possible at the end of August.

For next year, the IMF expects Montenegro to record 5.5% economic growth and 3% in 2025, which means the economic recovery will be slow and will take years to return to the 2019 level, when the IMF estimates the country's economy grew by 3.6%.

The IMF estimate is similar to World Bank’s forecast that predicted a 12.4% drop in Montenegro’s gross domestic product. Both international forecasts differ from the Montenegrin government’s June forecast that predicted a 6.8% drop in GDP. The IMF expects Croatia’s GDP to fall by 9%, Albania and Kosovo by 7.5% each, Bosnia and Herzegovina by 6.5%, North Macedonia by 5.4% and the smallest economic downturn in the region is forecast for Serbia at 2.5%. The IMF expects Montenegro to have a 14.2% current account deficit this year, which is expected to decrease to 13.6% in 2021.

Serbia to get new government

"The government will have new energy, [we are] more than ready to face all the challenges in 2021”

- Serbia's prime minister Ana Brnabić

Serbia’s Prime Minister-designate Ana Brnabić announced her new Cabinet at the end of October. President Aleksandar Vučić had tasked Brnabić to form a new government after his Serbian Progressive Party (SNS) won 60% of the vote in June 21 general and local elections amid an opposition boycott. Vučić announced that both the SNS and Socialist Party of Serbia (SPS) would be part of the ruling coalition. She added that the new government will have six goals that it will pay special attention to:

  1. the fight against COVID, Kosovo and Metohija,
  2. the fight against organized crime and the war against the mafia,
  3. independent decision-making by Serbia,
  4. the rule of law and accelerating reforms and
  5. further economic strengthening of Serbia.

The new government will have 21 departments, while 11 of the Cabinet members are women.

Adriatic Journal

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