World Bank: Montenegrin Economy Sees Biggest Recession in the Region, Public Debt Heading for 98% of GDP

The World Bank has estimated that the Montenegrin economy is to see the biggest recession in the Western Balkans this year, with a record public debt of nearly 100% of the GDP. This projection is largely down to the country’s great dependence on tourism.

The World Bank also estimates that the already high public will reach a peak of 98% of the GDP in 2021, whereas the construction of the second section of the Bar-Boljare highway would be a great risk to its sustainability.

The institution warns that servicing the public debt is a great burden to the Montenegrin finances.

Economic recovery will depend on tourism, but the coronavirus pandemic is a serious risk, because, if it remains present this summer, it will once again have negative consequences to the tourist season.

The World Bank projects that the first section of the highway will be finished in 2022. The new deadline for the completion of the first highway section has not yet been agreed with the Chinese contractor and financing entity, except for the government’s announcements that it expects the job to be completed by the end of the year.

In early October, the World Bank projected a drop of the Montenegrin economy by 12.4% and the public debt at 93% of the GDP at the end of the year.

In the June projection for this year, a drop of GDP by 6.8% was predicted, which is equal to the government’s estimates.

The IMF recently projected the drop of the GDP of Montenegro in 2020 to 12%.

World Bank

WB

International Monetary Fund

IMF

Government of Montenegro

public debt

construction of a highway

Bar Boljare highway

tourism

coronavirus pandemic

economic drop

GDP

GDP drop