S&P Global Ratings raised its outlook on Montenegro to stable from negative and affirmed the country's B+/B long- and short-term foreign and local currency sovereign credit ratings.
The rating agency said the revised outlook reflected its expectation that Montenegro's government will implement recently legislated revenue and expenditure measures that would help reduce government deficits.
According to S&P, Montenegro's general government debt is projected to rise 74% by 2019 due to highway-related expenditures, while the deficit would be 2.3% of GDP in 2020, as opposed to the government's forecast of a budget surplus.
Montenegro's ratings could be lowered over the next 12 months if the government fails to implement the fiscal consolidation measures, S&P said. Though it is highly unlikely over the next two years, S&P said the ratings could be raised due to fiscal improvements and significant reduction in external vulnerabilities.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.