This report covers the main macroeconomic releases from May 5 until June 4 as well as the financial and political events that took place in Montenegro during this period. The EBRD revised up its 2014 growth projection for Montenegro to 3.0% in the May edition of its Regional Economic Prospects from 2.0% in the previous issue of the report in January 2014. The 2014 growth outlook will be underpinned by improvements in external demand and progress in major infrastructure projects. Montenegro successfully issued a EUR 280mn five-year Eurobond on May 13 at a yield of 5.50% and with a maturity of 5 years. The final pricing represents the lowest re-offer yield ever achieved by the country for an international bond issue, the finance ministry has said. The securities bear a 5.375% coupon. In May, Standard & Poor's has affirmed its BB-/B long- and short-term foreign and local currency sovereign credit ratings on Montenegro citing the country’s better-than-anticipated economic growth and fiscal performance in 2013. The government expects the 2014 gap to shrink further to 0.75% of GDP from 3.65% of GDP a year ago on higher- than-expected revenue growth and budget austerity measures. In January-April, the budget deficit narrowed 21.5% y/y to EUR 59.1mn, as strong revenue growth offset a softer increase in expenditures, the finance ministry reported. Nonethless, despite better than expected fiscal performance in both 2013 and in early 2014, Montenegro continues to face considerable fiscal risks related to the construction of the Bar-Boljare highway project. The country’s public debt grew 12.9% y/y to EUR 1.95bn at end-January, quickening from a 10.2% y/y growth a month earlier, on the back of rising internal and external liabilities. The CPI declined for a fourth straight month in April, going down by 1.4% y/y after dropping by 0.9% y/y the month before. April’s industrial production declined by 27.9% y/y following a 20.6% y/y contraction the month before due to falling manufacturing and utilities sector output, which offset rising mining and quarrying production. Net FDI inflow to Montenegro grew 19% y/y to EUR 78mn in January-March, equalling to 2.2% of the full-year GDP forecast.