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Montenegro Economy
 
 
 

General

The economy of Montenegro is mostly service-based and is in late transition to a market economy. According to the International Monetary Fund, the nominal GDP of Montenegro was $4.114 billion in 2009. The GDP PPP for 2009 was $6.916 billion, or $11,048 per capita.

GDP grew at an impressive 10.7% in 2007 and 7.5% in 2008. The country entered a recession in 2008 as a part of the global recession, with GDP contracting by 4%. However, Montenegro remained a target for foreign investment, the only country in the Balkans to increase its amount of direct foreign investment. The country is expected to exit the recession in mid-2010, with GDP growth predicted at around 0.5%. However, the significant dependence of the Montenegrin economy on foreign direct investment leaves it susceptible to external shocks and a high export/import trade deficit.

In 2007, the service sector made up for 72.4% of GDP, with industry and agriculture making up the rest at 17.6% and 10%, respectively.

According to Eurostat data, the Montenegrin GDP per capita stood at 46% of the EU average in 2008. Aluminium and steel production and agricultural processing make up for most of the industrial output.

Tourism is an important contributor to Montenegrin economy. Approximately one million tourists visited Montenegro in 2007, resulting in €480 million of tourism revenue. Tourism is considered the backbone of future economic growth, and government expenditures on infrastructure improvements are largely target towards that goal.

Overview

Economy - overview :
Montenegro severed its economy from federal control and from Serbia during the Milosevic era and maintained its own central bank, adopted the Deutchmark, then the euro - rather than the Yugoslav dinar - as official currency, collected customs tariffs, and managed its own budget. The dissolution of the loose political union between Serbia and Montenegro in 2006 led to separate membership in several international financial institutions, such as the European Bank for Reconstruction and Development. In January 2007, Montenegro joined the World Bank and IMF. Montenegro is pursuing its own membership in the World Trade Organisation and signed a Stabilisation and Association agreement with the European Union in October 2007. The European Council granted candidate country status to Montenegro at the December 2010 session. Unemployment and regional disparities in development are key political and economic problems. Montenegro has privatised its large aluminium complex - the dominant industry - as well as most of its financial sector, and has begun to attract foreign direct investment in the tourism sector. The global financial crisis has had a significant negative impact on the economy, due to the ongoing credit crunch, a decline in the real estate sector, and a fall in aluminium exports.

GDP (purchasing power parity) :
$6.569 billion (2010 est.)

GDP (official exchange rate) :
$3.884 billion (2010 est.)

GDP - real growth rate :
-1.8% (2010 est.)

GDP - per capita (PPP) :
$9,900 (2010 est.)

GDP - composition by sector :
agriculture: NA%
industry: NA%
services: NA%


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