This report covers the main macroeconomic releases from February 5 until March 5, 2014, as well as the financial and political events that took place in Montenegro during this period. The report also includes corporate news for companies including KAP and Uniprom, mining firm Rudnici Boksita, and Czech firm Skoda Praha.

The EC revised its forecast for Montenegro's 2014 economic growth upward to 2.7% in the winter edition of its European Economic Forecast from the 2.3% projected in the autumn. This year's growth will be mainly underpinned by rising net exports and a new wave of tourism, energy and infrastructure investments.

Montenegro’s budget deficit shrank 9.6% y/y to EUR 23.5mn in January 2014 as revenue increased markedly over the period, whereas expenditures were lower than expected. The Montenegrin government managed to sell 43% of the EUR 100mn four-year bond issue it offered for sale on the local stock exchange. Montenegro's public debt grew 10.2% year on year to EUR 1.87bn at end-December 2013, underpinned by both rising internal and external liabilities. The country plans to borrow up to EUR 358mn in 2014 to service its debt and finance its budget gap and capital investments in various sectors.

Key Points:

• In corporate news, the bankruptcy receiver of Montenegrin aluminum firm KAP, Veselin Perisic, decided to sell the company's assets to privately held Uniprom for EUR 28mn.

• The commercial court in charge of the insolvency proceedings of Montenegrin bauxite mining firm Rudnici Boksita declared the company bankrupt on Wednesday, February 26, since no party has submitted a restructuring plan for the troubled firm.

• Montenegrin state-controlled energy producer EPCG announced that after direct negotiations and evaluation of all bids by a working group, its board of directors has decided to proceed talks on the TE Pljevlja 2 project with Czech firm Skoda Praha, Powerchina’s Hubei Electric Power Survey & Design Institute and China Machinery Engineering Corporation (CMEC).

• The CPI edged down 0.4% year on year in January, after inching up 0.3% year on year in December mainly due to falling food, transport, housing and utilities and clothing and footwear costs.

• January’s industrial production growth slowed to 7.4% year on year from 14.5% year on year in December as rising manufacturing and mining and quarrying output was partly offset by falling utilities production.

• Net FDI inflow to Montenegro shrank 29.6% year on year to EUR 323.9mn in 2013 following a 16.6% rise the year before, due to falling equity investments which offset higher inter-company lending.