Developments Since Independencs Montenegro’s economy has been broadly stable although fiscal and current account deficits remain unsustainably high. External indebtedness has been growing in recent years after significant write-off from main creditors such as London and Paris Club of creditors. Real growth of output was sluggish over the past couple of years and probably well below the potential and below the regional average. GDP per capita in 2005 is estimated to be US$ 3,286. In the meantime, there were some important privatizations (KAP and Podgoricka Banka), as well as significant inflow of foreign investments which are expected to enhance private sector led growth. This especially relates to service sectors (tourism, trade and transport) which have great potential. Challenges Ahead - Building a sustainable economic base.—Further reforms will streghthen the country as an independent state.
- Improving the fiscal sustainability and current account deficit.—This is one of the major economic challenges that lies ahead as economic development remains highly vulnerable, particularly to external shocks.
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