Standard & Poor’s affirms a stable outlook for Montenegro

The credit rating agency Standard & Poor’s has released a new report for Montenegro, confirming our country’s outlook as "stable", while affirming its B+/B ratings. Following the support of the World Bank and the International Monetary Fund to the measures implemented by the Government in the field of fiscal consolidation, the support comes from yet another renowned global institution – the S&P.

Credit analysts have confirmed that Montenegro is on a good development path, assessing that the domestic economy grew by 4.5% in 2017, owing to a good tourism season and ongoing infrastructure projects. In addition, Montenegro’s stable outlook was affirmed, indicating that further rating movements are based on stable positions. The stable outlook rating reflects the balance between the implementation risks and the fiscal adjustment program over the next 12 months, on the one hand, and upside potential if economic growth is stronger, on the other. As the report states, the government continues along a fiscal consolidation path, which will reverse the upward trajectory of public debt by 2019. The stable outlook rating is based on the favorable growth potential, given the possibilities for further development of tourism and the energy sector, as well as comparatively strong institutional settings in the region. Also, an upside potential from structural reforms was also recognized, which Montenegro has to implement in the course of negotiations for the EU membership.

Experts of the aforementioned institution estimate that the ratings for Montenegro could be raised if multiple projects currently ongoing in the infrastructure, energy and tourism sectors yielded better-than-expected results, improving Montenegro’s growth outlook and reducing balance-of-payments risks.