Visit-Montenegro.com : Certain Investments Would be Postponed

Podgorica – According to the available data, total of 0,9 percent of deposits has been withdrawn from Montenegrin banks during the month of September. During the last week, there were no withdrawals. This, according to the Chief Economist of the Central Bank of Montenegro (CBCG), Nikola Fabris, who presented the Study of Direct Foreign Investments at a working breakfast with journalists yesterday.

“During the last seven days, there has been no withdrawal of deposits. What is most important is that the economy did not ask for them”, Fabris said.

Since the beginning of the year, 435 Million in direct foreign investment has arrived to Montenegro, which is by 15 percent more than during the same period last year.

Chief Economic of CBCG expects that influx of direct foreign investments would exceed last year’s record of Euro 525 Million.

“Direct foreign investors continue showing interest in Montenegro, although it is definitely certain that the financial crisis would have effect to the decrease of the influx for estimated 30 to 50 percent on the global level”, Fabris announced.

Total influx of direct foreign investments between 2001 and today amounts to Euro 2,89 Billion. CBCG anticipates it would exceed three Billion Euro by the end of the year.

“Structure of direct foreign investments has been changed in this year. Investments into the sector of the real estate have dropped from last years’ 50 to this years 39 percent. Inter-company debt is growing and the investment of companies to their affiliates in Montenegro is dropping. In this field, tourist and banking sector are ahead of the others”, Fabris maintained.

Fabris could not say who was the largest individual investor in Montenegro, as that type of information could be obtained only through clients’ bank and is considered confidential.

“Regional structure of direct foreign investments is favorable, as we now have investors from 107 countries. During the last six years, our leading investors arrived from 10 countries, thus covering 73 percent of the total influx of direct foreign investments”, Fabris maintained.

First position on the list of the biggest investors is held by Russia, followed by Hungary, Great Britain, Switzerland, Cyprus, Austria, Slovenia, Germany, Serbia and the USA.

“It is evident that certain number of investors, who have shown interest into investing to Montenegro, would postpone their decisions on investments, as each investment requires a credit support and access to credits would decrease significantly.

This does not mean that they would disappear or give up on Montenegro. Only that they would postpone their investments for the period of one or two years”, Fabris emphasized.

He estimated that Montenegro would top the list of transitional economies during the next year, when it comes to the amount in direct foreign investments.

According to the data of Finance Ministry for the upcoming year, there is guaranteed Euro 300 Million in investments.

Fabris maintained that the global crisis would inflict the most serious blow to the building sector, as smaller number of credits would also lead to the decrease of demand and prices.

“Building sector should provide a chance for the decrease in prices and investments in the tourist sector through the building and reconstruction of hotels. In Montenegro, value of real estate is two times higher than the amount in loans, which leaves the space to decrease the prices and meet the obligations to the banks”, Fabris maintained.

Government Does Not Want to Close Down KAP

Fabris has also been a member of the working group which has analyzed current position of the Factory of Aluminum (KAP). He refused to disclose details on the participation of KAP in Montenegro’s GDP. He also refused to reveal detailed data about this analysis.

“This is something government has insisted upon. I can say it is my impression that government does not wish to close down KAP. And, all the information which went public about the consequences of this factory’s shutdown are not true”, Fabris concluded.

(5 November 2008)

By: Ma.M.