The International Monetary Fund (IMF) announced that Montenegro’s GDP dropped 7 per cent in 2009, which is a decline more severe than in other countries, reports BETA news agency.

"There are no clear signs of a short-term recovery of the Montenegrin economy," head of the IMF delegation that spent a regular two-week visit to Montenegro, Garwin Bell, told a news conference in Podgorica.

The Montenegrin economy stands a chance of a relatively quick recovery, Bell said, if the authorities follow IMF recommendations. The IMF reiterated the estimate that Montenegro will see a two percent decrease in the GDP this year, whereas economic recovery is expected as of 2011. Bell went on to say that the country's budget deficit accounts for three percent of the GDP and that the public debt has "deteriorated" and now accounts for 39% of the GDP.

The IMF delegation suggested to the Montenegrin government to "urgently and thoroughly" adjust the economic policy previously based on the high inflow of foreign capital and an unfavourable ratio of debt and capital in banks. The IMF added that the budget framework is balanced, but that it is necessary to cut expenses and increase taxes or combine the two measures.

Bell declined to talk about the IMF's potential credit arrangement with Montenegro, because the financial organization has not received a request from the Montenegrin said yet.