Fiscal and Macroeconomic Trends for the First Quarter of 2011

• Pursuant to the data available for 2011 , macroeconomic trends are indicating that Montenegrin economy is in the stage of a slight recovery, representing the continuation of trends from the second half of 2010. Pursuant to the preliminary data of Monstat and the estimates of the Ministry of Finance, it can be concluded with the high probability that the GDP growth in 2010, exceeded the projected 0.5 percent and that the final data will indicate the growth of above 1 percent. This growth rate correction was the result of the strong growth in the sectors of electricity generation, mining and real – estate.

• Positive trends in the first quarter of this year are evident with the payment operations indicators, retail sales, wages tax, indirect taxes, manufacturing and mining. A positive signal is the increased number of announced vacancies by of around 2, 7 thousand (around 43 percent) in the period January – April compared to the same period of last year.

• The further fall in the credit activity of banks is still worrying (yet unofficial data as of March indicate the growth after a long permanent downturn), increase in the blocked accounts value and percent, increase in tax debt and increase in CPI.

• As envisaged in the previous analysis, the economic activity has picked up strongly in both the electricity generation sector from the peak level in previous year, and the agriculture production from the low stance in previous year.

• After stagnation during the most part of the year and first ever deflation recorded in August 2010, the prices from last quarter 2010 to February 2011 recorded a mild growth. Increase in CPI amounts to 2 % annually.

• Net FDI inflow amounts to EUR 56, 3 million or 24, 7 percent above the last year’s monthly average.

• Employment stabilized after the seasonal growth in summer months having a slight growth in last two months. Unemployment rate is at the level of last year with expected seasonal adjustments...