Monday, December 29, 2008
Montenegro hopes investment to keep growth on track
PODGORICA, Dec 29 (Reuters) - Montenegro will test investor confidence in 2009 by putting up for sale a 22 percent stake in its power monopoly and opening up projects in energy, tourism and infrastructure.
'If we realise only part of planned investment in tourism, energy and infrastructure, it is realistic to achieve a more dynamic growth than the one forecast by the IMF,' Prime Minister Milo Djukanovic told a news conference on Monday.
The IMF said this month it expected Montenegro's economy to grow only 2 percent in 2009 and 2010, far below the rate of recent years, while Djukanovic's government expects a 5-percent increase.
Analysts say investment is vital to finance the current account deficit, estimated at 19 percent of GDP in 2008. The government expects this to fall to 18.5 percent in 2009.
Djukanovic said the country expected to finalise a tender for the construction of a 2 billion euro highway in 2009 despite the economic crisis.
'We will also soon announce a tender for the sale of a 22 percent stake in the Montenegrin Power Company as well as for the construction of new power utilities,' he said, referring to a planned capital hike in Elektroprivreda Crne Gore (EPCG) power monopoly.
'Nowadays, every single cent available for investment around the world goes to the energy sector, therefore I am confident that the capital increase will be successful as well as other projects in the energy sector,' Djukanovic said.
Work on landing a 700 million euro undersea cable connecting Montenegro and Italy were also expected to start in 2009. The government would also offer for sale 15 holiday resort locations.
'All this is the grounds for our optimism in forecasting real growth of some 5 percent and the imperative is to maintain positive trends from past years,' Djukanovic said.
The former Yugoslav republic of 650,000 people ended its loose union with Serbia in 2006 and has since enjoyed strong growth, mainly driven by tourism. The economy is expected to have grown by 8 percent in 2008.
(Reporting by Dusko Mihailovic; Editing by Gordana Filipovic and David Cowell) Keywords: MONTNEGRO/SELLOFFS
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