Identifier
Created
Classification
Origin
06BELGRADE711
2006-05-08 07:11:00
UNCLASSIFIED
Embassy Belgrade
Cable title:
MONTENEGRO: ECONOMIC DEVELOPMENTS: APRIL 2006
how-toVZCZCXRO6717 RR RUEHAG RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN RUEHLZ RUEHROV RUEHSR RUEHVK RUEHYG DE RUEHBW #0711/01 1280711 ZNR UUUUU ZZH R 080711Z MAY 06 FM AMEMBASSY BELGRADE TO RUEHC/SECSTATE WASHDC 8520 INFO RUEATRS/DEPT OF TREASURY WASHDC RUCPDOC/USDOC WASHDC RUEHC/DEPT OF LABOR WASHDC RUEHZL/EUROPEAN POLITICAL COLLECTIVE
UNCLAS SECTION 01 OF 02 BELGRADE 000711
SIPDIS
SIPDIS
DEPARTMENT PASS TO OPIC, EXIM, TDA AND USAID
USDOC FOR 4232/ITA/MAC/OEERIS/SSAVICH
E.O. 12958: N/A
TAGS: ECON EFIN KPAO ETRD EINV EAID PGOV MW SR
SUBJECT: MONTENEGRO: ECONOMIC DEVELOPMENTS: APRIL 2006
Index:
MACROECONOMICS:
-- Indebtedness below European limit
-- Low Inflation in Early 2006
-- Industrial Production Rises
BUSINESS and TOURISM:
-- Microsoft Satisfied with Software Legalization Results
-- Montenegro Airlines Shows Modest Profit
-- Winter Tourism Up
-- Ada Bojana: Longer Lease Term to be Offered
PUBLIC ECONOMY:
-- Unemployment Steady
-- Real Wages Rise
T-BILLS
STOCKS
MACROECONOMICS:
Indebtedness below European Limit
UNCLAS SECTION 01 OF 02 BELGRADE 000711
SIPDIS
SIPDIS
DEPARTMENT PASS TO OPIC, EXIM, TDA AND USAID
USDOC FOR 4232/ITA/MAC/OEERIS/SSAVICH
E.O. 12958: N/A
TAGS: ECON EFIN KPAO ETRD EINV EAID PGOV MW SR
SUBJECT: MONTENEGRO: ECONOMIC DEVELOPMENTS: APRIL 2006
Index:
MACROECONOMICS:
-- Indebtedness below European limit
-- Low Inflation in Early 2006
-- Industrial Production Rises
BUSINESS and TOURISM:
-- Microsoft Satisfied with Software Legalization Results
-- Montenegro Airlines Shows Modest Profit
-- Winter Tourism Up
-- Ada Bojana: Longer Lease Term to be Offered
PUBLIC ECONOMY:
-- Unemployment Steady
-- Real Wages Rise
T-BILLS
STOCKS
MACROECONOMICS:
Indebtedness below European Limit
1. Montenegro's public debt at the end of 2005 amounted to
Euros 700 million or 43 percent of gross domestic product
(GDP),which according to the Ministry of Finance is below
the maximum allowed level in the EU. In 2002, public debt
was 88 percent of GDP. According to Maastricht criteria,
the total debt of the public sector must not cross 60
percent of GDP.
Low Inflation in Early 2006
2. According to the Central Bank of Montenegro (CBCG),the
January inflation rate in Montenegro was 0.2 percent;
inflation in February was 0.1 percent.
Industrial Production Rises
3. According to MonStat (the Montenegro Statistic Bureau),
in the first three months of 2006, industrial production
rose by 4.4 percent when compared to the same period last
year, while March production was 11.3 percent higher than
in the prior month.
BUSINESS and TOURISM:
Microsoft Satisfied with Software Legalization Results
4. Microsoft is working with the GoM and with private
business to increase the use of licensed software in
Montenegro. After two months, Microsoft said it was
satisfied with the legalization campaign, with the entire
public sector covered, as well as the telecommunication
sector, financial institutions, and all larger companies as
well as a significant number of small and medium size
enterprises. The campaign officially closed on May 1, to be
followed by full implementation of the Law on the
Enforcement of Intellectual Property Rights.
Montenegro Airlines Shows Modest Profit
5. Montenegro Airlines' income in 2005 was almost Euros
42.8 million, yielding a profit of approximately Euros
50,590. Last year Montenegro Airlines had 470,000
passengers, which is 28 per cent more than in 2004. The
company is scheduled to be privatized this year,
Winter Tourism Up
6. The Ministry of Tourism estimates that total income from
winter tourist season in Montenegro this year should range
from Euros 13 to Euros 15 million, which is 30 to 50 per
cent more than in 2005. During the winter, Montenegro was
visited by 49,700 tourists, which is 28.4 per cent more
than last year. The Ministry added that 400,000 foreign
tourists are expected during the summer season this year.
Ada Bojana: Longer Lease Term to be Offered
7. The GoM will seek to offer a longer lease term for the
lease of Ada Bojana, up from 30 years to 45 years. The
longer lease term will make the planned construction of a
number of four- and five-star hotels more attractive to
serious investors. The extension of the offered lease term
was made after intervention with the GoM by the Consulate.
BELGRADE 00000711 002.2 OF 002
PUBLIC ECONOMY:
Unemployment Steady
8. The GoM said unemployment was steady at 18.6 percent, or
15.1 percent lower than last year at this time.
Real Wages Rise
9. The average net monthly wage in March was Euros 236, up
two percent from February. Retail prices rose 0.1 percent,
and the consumer basket for a family of four rose 0.8
percent to Euros 267. (MonStat data)
T-BILLS
10. One auction of Treasury bills, with a total face value
of EUR 1.0 million, was held in March (note: data lags by
one month). The average weighted annualized interest rate
for the auction held in March amounted to 0.97 percent.
The lowest accepted interest rate at the auctions held in
February was 0.80 percent while the highest accepted
interest rate was 1.00 percent. Participants at the
auctions included local banks.
STOCKS
11. The NEX20 index of the Nex Montenegro Stock Exchange
ended the month of April up 2.9 percent, at 10,554.47. The
Moste index of Montenegroberza declined 1.0 percent to
482.726 in April. The steadiness in the markets, after the
sharp (400%) growth in 2005, reflects the completion of
major privatizations and a lull before the next tranche.
Major components of the NEX20 include the privatized
Telekom CG and Jugopetrol; major components of the Moste
include aluminum smelter KAP and vineyard Plantaze. Note:
The Montenegrin exchanges are still nascent, and the level
of capitalization represented is small although rising (NEX
capitalization at the end of 2004 was Euros 495 million; at
the end of November 2005 it was Euros 1,410 million).
POLT
SIPDIS
SIPDIS
DEPARTMENT PASS TO OPIC, EXIM, TDA AND USAID
USDOC FOR 4232/ITA/MAC/OEERIS/SSAVICH
E.O. 12958: N/A
TAGS: ECON EFIN KPAO ETRD EINV EAID PGOV MW SR
SUBJECT: MONTENEGRO: ECONOMIC DEVELOPMENTS: APRIL 2006
Index:
MACROECONOMICS:
-- Indebtedness below European limit
-- Low Inflation in Early 2006
-- Industrial Production Rises
BUSINESS and TOURISM:
-- Microsoft Satisfied with Software Legalization Results
-- Montenegro Airlines Shows Modest Profit
-- Winter Tourism Up
-- Ada Bojana: Longer Lease Term to be Offered
PUBLIC ECONOMY:
-- Unemployment Steady
-- Real Wages Rise
T-BILLS
STOCKS
MACROECONOMICS:
Indebtedness below European Limit
1. Montenegro's public debt at the end of 2005 amounted to
Euros 700 million or 43 percent of gross domestic product
(GDP),which according to the Ministry of Finance is below
the maximum allowed level in the EU. In 2002, public debt
was 88 percent of GDP. According to Maastricht criteria,
the total debt of the public sector must not cross 60
percent of GDP.
Low Inflation in Early 2006
2. According to the Central Bank of Montenegro (CBCG),the
January inflation rate in Montenegro was 0.2 percent;
inflation in February was 0.1 percent.
Industrial Production Rises
3. According to MonStat (the Montenegro Statistic Bureau),
in the first three months of 2006, industrial production
rose by 4.4 percent when compared to the same period last
year, while March production was 11.3 percent higher than
in the prior month.
BUSINESS and TOURISM:
Microsoft Satisfied with Software Legalization Results
4. Microsoft is working with the GoM and with private
business to increase the use of licensed software in
Montenegro. After two months, Microsoft said it was
satisfied with the legalization campaign, with the entire
public sector covered, as well as the telecommunication
sector, financial institutions, and all larger companies as
well as a significant number of small and medium size
enterprises. The campaign officially closed on May 1, to be
followed by full implementation of the Law on the
Enforcement of Intellectual Property Rights.
Montenegro Airlines Shows Modest Profit
5. Montenegro Airlines' income in 2005 was almost Euros
42.8 million, yielding a profit of approximately Euros
50,590. Last year Montenegro Airlines had 470,000
passengers, which is 28 per cent more than in 2004. The
company is scheduled to be privatized this year,
Winter Tourism Up
6. The Ministry of Tourism estimates that total income from
winter tourist season in Montenegro this year should range
from Euros 13 to Euros 15 million, which is 30 to 50 per
cent more than in 2005. During the winter, Montenegro was
visited by 49,700 tourists, which is 28.4 per cent more
than last year. The Ministry added that 400,000 foreign
tourists are expected during the summer season this year.
Ada Bojana: Longer Lease Term to be Offered
7. The GoM will seek to offer a longer lease term for the
lease of Ada Bojana, up from 30 years to 45 years. The
longer lease term will make the planned construction of a
number of four- and five-star hotels more attractive to
serious investors. The extension of the offered lease term
was made after intervention with the GoM by the Consulate.
BELGRADE 00000711 002.2 OF 002
PUBLIC ECONOMY:
Unemployment Steady
8. The GoM said unemployment was steady at 18.6 percent, or
15.1 percent lower than last year at this time.
Real Wages Rise
9. The average net monthly wage in March was Euros 236, up
two percent from February. Retail prices rose 0.1 percent,
and the consumer basket for a family of four rose 0.8
percent to Euros 267. (MonStat data)
T-BILLS
10. One auction of Treasury bills, with a total face value
of EUR 1.0 million, was held in March (note: data lags by
one month). The average weighted annualized interest rate
for the auction held in March amounted to 0.97 percent.
The lowest accepted interest rate at the auctions held in
February was 0.80 percent while the highest accepted
interest rate was 1.00 percent. Participants at the
auctions included local banks.
STOCKS
11. The NEX20 index of the Nex Montenegro Stock Exchange
ended the month of April up 2.9 percent, at 10,554.47. The
Moste index of Montenegroberza declined 1.0 percent to
482.726 in April. The steadiness in the markets, after the
sharp (400%) growth in 2005, reflects the completion of
major privatizations and a lull before the next tranche.
Major components of the NEX20 include the privatized
Telekom CG and Jugopetrol; major components of the Moste
include aluminum smelter KAP and vineyard Plantaze. Note:
The Montenegrin exchanges are still nascent, and the level
of capitalization represented is small although rising (NEX
capitalization at the end of 2004 was Euros 495 million; at
the end of November 2005 it was Euros 1,410 million).
POLT