Economic Growth Forecasted for Montenegro

Milorad Katnić, the Minister of Finance, announced the official government projections for economic growth over the next few years:

2011 – 3.2%
2012 – 3.5%
2013 – 3.5%
2014 – 3.5%
2015 – 4%

These forecasts rely upon a list of critical factors:

  • Levels of Foreign Direct Investment (FDI) and overall investment must remain high
  • Businesses must improve productivity
  • private sector competitiveness must improve
  • The deficit must be held below one percent of GDP
  • The 2013 budget must be balanced
  • The 2014 and 2015 budgets must produce a net surplus
  • Government spending must be reduced
  • Public debt must be reduced
  • Subsidies to businesses must be reduced
  • Government payroll expenditures must be reduced
  • The capital budget should hold at around 4% of GDP
  • The government must build and maintain public-private partnerships

Missing any of these goals will result in reduced economic growth for the nation.

The tourism industry is expected to be a major contributor to this economic growth.  This will require FDI to aid in a large number of construction and renovation projects.  In addition it will require the government to invest in upgrading the public infrastructure, such as roads, power, and water supplies.

 

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