S&P changes Montenegro to negative

S&P said it revised its outlook on Montenegro to negative from stable and affirmed its B+/B long- and short-term foreign and local currency sovereign credit ratings.

S&P said the outlook revision reflects its view of Montenegro's constrained capacity to respond to domestic and external shocks, given limited monetary and fiscal flexibility.

Compared with its last review, the agency now anticipates much larger general government fiscal deficits, leading to a higher increase in government debt over the next four years.

S&P estimates that general government debt will increase annually, by 7½% of GDP on average, to just below 80% of GDP in 2019 from 63% of GDP in 2015. The agency expects that the majority of commercial debt will continue to be held by non-residents.

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