Economic policies in need of revision
Overview:
Montenegro has enjoyed strong economic growth over the last few years and is making progress in its EU Accession agenda. However, it is likely to be heavily exposed to the sharp global economic downturn given the structure of its economy and a number of economic vulnerabilities that have built up in the last few years. Economic policies do not, currently, seem to reflect the challenges that Montenegro will face this year as growth slows, asset prices fall and financing for its huge current account deficit becomes less readily available. Parliamentary elections will be held at the end of this month. The ruling coalition is thought likely to retain power. The incoming government will, however, have to redraw the budget. Euro adoption has had its advantages but will also make adjustment to the oncoming downturn painful.