Standard & Poor's lowers Montenegro's credit rating

Podgorica, Montenegro (14 November 2014) -- Standard & Poor's Ratings Services lowered Montenegro's credit rating from "BB-" to "BB+", the S&P's newly published report reads. At the same time, the report confirms Montenegro’s stable outlook, indicating that further movement of the rating is based on stable positions. 

Reduce of the credit rating reflects the agency’s position that the state faces growing fiscal risks caused by an increase in the public debt for the highway’s construction. According to S&P analysts, the indebtedness increases the sensitivity of the Montenegrin economy and finances to external shocks and limits the scope for adaptation, in particular when taking into account that Montenegro is characterised by the absence of the emission function and passive monetary policy.

On the other hand, the report recognises and commends the progress made towards the consolidation of public finances in recent years, which, if we exclude the cost of the highway, resulted in low deficit level.

Standard & Poor's forecasts that Montenegro’s economic activity will grow at an average 3% by 2017, which will be partly contributed by some positive aspects of the highway construction, primarily the engagement of domestic construction.

Recalling of the fact that Montenegro moved up to 36th place overall in the Doing Business 2015 world ranking list, the Standard & Poor's analysts agree that Montenegro is an attractive investment destination, and further investments, especially in the fields of tourism, energy and agriculture, would accelerate its future economic growth.