Weak credit activity of banks, illiquidity of the real sector, growth in food imports, decline in exports of food products, rising unemployment and inflation are the main negative trends that characterized the first three months of 2011.
This was shown by the analysis of the implementation of the economic policy of Montenegro for the first quarter of 2011, which was adopted by the Government.
The analysis showed that the caution of banks regarding the placement of funds in projects from the economy is still present, which can slow down the process of overcoming illiquidity in the economy.
The available data on economic trends, as stated in the document, at the beginning of 2011 are not sufficient for more complete conclusions, but they indicate the continuation of the process of economic recovery and the creation of conditions for dynamizing the growth that began in the third quarter of last year.
The analysis showed that the caution of banks regarding the placement of funds in projects from the economy is still present, which can slow down the process of overcoming illiquidity in the economy.
"The general economic climate is favorable with a focus on maintaining macro-economic stability and the strict implementation of budget policy and public finance restrictions, along with savings and rationalization measures, so the objective space and environment for business activity and development is larger and more advanced," it is stated in the Government's document.
The Analysis did not include data on the realization of GDP for the first three months of 2011 due to, as explained, incomplete data on economic trends.
"However, the incomplete data at the beginning of this year indicate that the recovery of economic trends is continuing, which, with a greater inflow of foreign direct investments in this period, creates a good basis for dynamizing the growth that started last year," the Analysis stated.
Assistant Minister of Finance Tijana Stanković, after the Government session, said that negative trends will be challenges for the Government in the coming period.
"Inflation recorded an annual growth of 3,7 percent in the first quarter of 2011 as a result of the influence from the world market due to the increase in energy prices, while unemployment slightly increased from 12,1 percent in 2010 to 12,4 percent in the first three month of 2011," said Stanković.
"Inflation recorded an annual growth of 3,7 percent in the first quarter of 2011 as a result of the influence from the world market due to the increase in energy prices, while unemployment slightly increased from 12,1 percent in 2010 to 12,4 percent in the first three month of 2011," said Stanković.
He said that the world economy is recovering slowly due to the rise in energy prices, which will result in an increase in inflation and unemployment.
"Positive trends are reflected in stable public finances. Expenditure control policies were continued, which resulted in their realization below the plan by eight percent. Montenegro's credibility was once again confirmed by the issuance of Eurobonds and the growth of investor interest, and intensive activities in creating an attractive environment for investments and operations. Positive signals from the financial market come through the growth of savings on an annual level of 13 percent and the maintenance of liquidity and solvency of the banking sector. In the real sector, the continuation of the growth trend of the manufacturing industry was recorded, which in the first quarter recorded a growth of 20 percent compared to the same period of the previous year. The growth of the processing industry was mostly influenced by the growth of wood processing, basic metals and chemical products," said Stanković.
She said that among the positive trends is the 100 percent increase in exports in the first quarter compared to the same period of the previous year, which was stimulated by the growth of exports of non-ferrous metals, iron and steel.
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