Highway Will Add to Montenegro’s Debts, IMF Says
The IMF representative for Montenegro, Alasdair Scott, on Sunday said the small coastal republic will have to "refinance certain costs" in coming years after taking out a major loan to start building the Bar-Boljari highway.
At the end of last year, Montenegro’s national debt stood at 1.87 billion euro, or 56 per cent of GDP.
The IMF has forecast that because of unforeseen infrastructure spending, particularly on the highway, the national debt will grow up until 2018, after which it will start falling.
"IMF projections, as always, are not final and we expect more precise information on how much will be spent on highway construction and on methods of financing," Scott told the daily newspaper Vijesti.
The construction of the 169-kilometre-long highway will start this year and will cost more than 2 billion euro in total.
In its 2014 World Economic Outlook report for Montenegro, released two weeks ago, the IMF predicted that the country’s gross national debt could reach more than 3 billion euro by 2019.
The IMF forecasts however run contrary to the government's own more optimistic predictions, which were outlined in a report in January.
The Podgorica authorities said that public debt will rise this year to 56.9 per cent of GDP, after which it will start to fall, owing to the growth of the economy.
The government expects growth to be stimulated by major projects such as the building of a luxury tourist complex on the coast, the start of construction of the highway and the opening of an underwater electricity link with Italy.