• This report covers the main macroeconomic releases from June 4 untill July 4 as well as the financial and political events that took place in Montenegro during this period. • GDP grew by a real 1.7% in the first quarter of 2014, slower than the government estimates of 2.3% annual hike and slowing from 3.0% annual growth in Q1 2013. The central bank forecast 3.2%-3.8% GDP growth this year, which is more optimistic than the EC, the EBRD and the IMF expectations for 2.9%, 3.0% and 2.8% GDP expansion, respectively, in 2014. • The CPI declined for the fifth consecutive month in May 2014 going down by 1.3% y/y and following a 1.4% drop in April, dragged down by falling food, furnishing, communication and recreation and culture costs. • The industrial production declined for a third consecutive month in May, shrinking by 23.4% y/y, despite improving from a 27.9% y/y contraction the month before, as the rising mining and quarrying production failed to offset falling manufacturing and utilities sector output. • The Q1 2014 current account gap shrank 4.7% y/y to EUR 183.97mn, mainly thanks to narrowing foreign trade deficit and higher services surplus. • Net FDI inflow to Montenegro increased by 14.4% in annual terms in January-April to EUR 94.5mn, which equalled to 2.7% of the full-year GDP forecast. • The current account gap shrank 4.7% y/y to EUR 183.97mn in the first quarter of 2014, mainly thanks to narrowing foreign trade deficit and higher services surplus. The reading equalled to 5.4% of the full-year GDP forecast.