This report covers the main macroeconomic releases from early till end-November 2013 as well as the financial and political events that took place in Montenegro during this period. The report also includes corporate news covering, among others, the insolvency of mining firm Rudnici Boksita. At end-November, S&P lowered Montenegro’s rating outlook to negative on high external vulnerabilities. The EBRD and the EC revised their 2013 GDP growth projections for Montenegro upward to 1.5% and 1.9% respectively. The government approved the 2014 draft budget targeting a deficit of EUR 66mn, down from this year’s projected gap of EUR 95mn. Russia's CEAC, one of the biggest shareholders and creditors of bankrupt Montenegrin aluminum firm KAP, said it has filed a EUR 100mn claim against Montenegro. On the economic front, October’s CPI edged up 0.5% y/y, easing from a 1.8% y/y increase in September due to a slower growth of food prices and falling transport, recreation and communications costs. Industrial production growth accelerated to 10.5% y/y in October from 3.0% y/y in September, due to rising manufacturing output. Key Points: • In corporate news, the EBRD has urged Montenegro to resolve as soon as possible the fate of its troubled aluminum firm KAP as a key priority for 2014 because the financial difficulties of the company have already spilled over to the public sector. • A Montenegrin commercial court decided on Tuesday, November 19, to start insolvency proceedings at bauxite mining company Rudnici Boksita over an unpaid debt of EUR 1.59mn to lender CKB, a local subsidiary of Hungary’s OTP. • The foreign trade deficit narrowed 4.8% y/y to EUR 1.2bn in the first 10 months of 2013. Net FDI inflow to Montenegro shrank 14.8% y/y to EUR 275.6mn in January–September due to lower equity investments.