1. Macroeconomic overview SEE and Montenegro
Zoltan Arokszallasi
Chief Analyst, Macro & FX/FI Research
Erste Group Bank
Erste Investors’ Breakfast, 1 October 2015, Podgorica
20. November 2018

2. SEE shows mixed performance in growth since the crisis
Source: Eurostat
20. November 2018

3. Montenegro’s economy recovering fast in the SEE subgroup
Quarterly real GDP growth (y/y, percent)
Source: Country statistical offices
20. November 2018

4. Annual inflation collapsing everywhere...
Annual increase of the consumer price index (percent)
Source: Eurostat
20. November 2018

5. Annual increase of the consumer price index (percent)
...and inflation is also moving in tandem everywhere based on monthly indices*
Annual increase of the consumer price index (percent)
* Except for countries where the government is strongly interfering (ie Romania)
20. November 2018

6. Capital stock per person employed is low, pointing to more investment as key to growth
Capital intensity and GDP per person vs Germany, 2011
Gross fixed capital formation, percent of GDP
Sources: FRED database, AMECO
20. November 2018

7. Labor market participation in % of total population
Labor market participation and employment both improving, but still behind EU avg
Labor market participation in % of total population
Sources: Eurostat, country statistical offices
20. November 2018

8. Tourism is very important for the economy, but some diversification and strengthening of other exports would be helpful
Tourism revenue as % of GDP, 2014
Merchandise trade as % of GDP, 2014
Sources: International Trade Centre calculations based on UN comtrade, MONSTAT
20. November 2018

9. Business and competitiveness rankings are not bad, but rooms for improvement are still visible
20. November 2018

10. Although fiscal gaps are narrowing on average in Europe...
Budget deficits in percent of GDP
Source: Eurostat
20. November 2018

11. ...public debt is still expected to grow in many SEE countries...
Expected accumulation of public debt to GDP, % points,
Source: Eurostat
20. November 2018

12. ...but net international investment position is more important for ratings than public debt
Sources: Eurostat, rating agencies
20. November 2018

13. Critical interest rates not yet reached in the budgets, but market sentiment helps a lot!
Interest paid by the central government vs current and critical interest rates
Source: Eurostat
20. November 2018

14. Government debt redemption and cash buffer (EURmn)
Government redemption structure shows need for additional issuance in near future
Government debt redemption and cash buffer (EURmn)
Source: Erste Group Research data collection
20. November 2018