Montenegro: 2011 Article IV Consultation—Staff Report; Public Information Notice; and Statement by the Executive Director for Montenegro

IMF Staff Country Reports, May 6, 2011

Source details

Canonical URL: Montenegro: 2011 Article IV Consultation—Staff Report; Public Information Notice; and Statement by the Executive Director for Montenegro

Since its independence in 2006, Montenegro has experienced an economic and financial roller coaster ride.
The baseline is predicated on continued improvements in cost competitiveness and productivity-raising foreign direct investment (FDI).
Avoiding a relapse into recession will require strengthening the health of the banking system and removing impediments to restructuring the economy.
Montenegro’s attractiveness to investors will depend on reducing macroeconomic and structural vulnerabilities.
The business environment needs to be further improved.
Redressing solvency issues and improving liquidity were jointly seen as priority tasks.

Economic trajectory characterized by volatility since 2006; stabilization depends on cost competitiveness and FDI-led productivity gains.
Major vulnerabilities identified:
- Banking system health concerns (solvency and liquidity).
- Structural impediments to economic restructuring.
- Macroeconomic and structural vulnerabilities undermining investor confidence.
Policy focus needed on measures that both restore financial sector stability and enhance the investment climate.

Strengthen the health of the banking system:
- Address solvency issues.
- Improve liquidity conditions.
Remove impediments to restructuring the economy to prevent relapse into recession.
Improve the business environment to increase attractiveness to investors and foster productivity-raising FDI.
Reduce macroeconomic and structural vulnerabilities to support sustained recovery and investor confidence.

_cr11100 — Executive Summary
- _cr11100 — Executive Summary (Markdown version)
- _cr11100 — Executive Summary (PDF)