Montenegro: Selected Issues

May 21, 2018

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Montenegro: Selected Issues, (USA: International Monetary Fund, 2018) accessed November 21, 2024

Summary

This Selected Issues paper analyzes the long-term growth prospects and the output gap in Montenegro. Historical growth in Montenegro was driven mostly by capital with some contribution from labor, while total factor productivity (TFP) contributed negatively. Going forward, in the baseline growth accounting framework with no reforms, employment will likely have a slightly negative contribution because of demographic dynamics unless both labor force participation and unemployment improve significantly. The highway project will contribute to capital accumulation in the near term, but the contribution from capital accumulation will likely fall despite relatively high investment ratios. Based on historical performance, the contribution from TFP is likely limited and constitutes the main bottleneck for long-term growth prospects in the no-reform baseline.

Subject: Fiscal policy, Fiscal stance, Labor, Labor markets, Output gap, Production, Total factor productivity

Keywords: Bank, Bank emergency liquidity assistance, Child care, CR, Eastern Europe, Europe, Expenditure, Expenditure elasticity, Fiscal policy, Fiscal stance, Global, Highway spending, IMF staff estimate, ISCR, Labor markets, Minimum wage, Output gap, Output gap estimate, Southern Europe, TFP assumption, TFP growth, Total factor productivity, Trend revenue

Publication Details

Pages:

65
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2018/122
Stock No:

1MNEEA2018002
ISBN:

9781484357026
ISSN:

1934-7685

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