Directorate for Economic Analysis and Projections
1. Division for Macroeconomic Analysis
The Division for Macroeconomic Analysis monitors and analyses current domestic and international economic developments, with a particular focus on short-term forecasting and nowcasting.
This division prepares short-term forecasts of GDP, inflation and other key macroeconomic indicators, using high-frequency data, leading economic indicators and modern statistical and econometric methods. It analyses developments in the real, fiscal and external sectors and the labour market, as well as short-term inflationary pressures and risks.
A key focus is timely identification of changes in the business cycle, identification of factors affecting current economic activity and updating of short-term economic outlooks.
These activities underpin regular macroeconomic reporting, the preparation of expert analyses for the CBCG management and the provision of short-term forecasting assumptions for medium-term macroeconomic projections.
2. Division for Economic Projections and Modelling
The Division for Economic Projections and Modelling is responsible for preparing integrated medium-term macroeconomic projections and developing a modern macroeconomic modelling framework, in line with the methodological standards and forecasting practices of the ECB and the Eurosystem.
Its activities include preparing mutually consistent projections of key macroeconomic variables, including economic growth, inflation, labour market developments, consumption, investment, the external sector and other relevant indicators, along with estimates of potential GDP and the output gap.
A central element of the division`s work is the development and application of structural macroeconomic models, monetary transmission models, vector autoregressive models and other modern econometric approaches, as well as to the analysis of interdependencies between the real, monetary and financial sectors.
The Division prepares baseline and alternative macroeconomic scenarios, conducts simulations of the impact of domestic and external shocks and assesses their medium-term effects on key macroeconomic variables.
The strategic priority is to develop an integrated national forecasting system and strengthen the CBCG’s capacity for future participation in the Eurosystem/ECB staff macroeconomic projection exercises (BMPE/MPE), including methodological alignment, consistency of projections and systematic risk analysis.
3. Division for EU/EMU Policies and Economic Research
The Division for EU/EMU Policies and Economic Research monitors and analyses monetary policy of the European Central Bank, economic and monetary policies of the European Union and the euro area, and their impact on macroeconomic and financial developments in Montenegro.
The focus is placed on analysing the ECB`s monetary policy decisions, changes in key interest rates, financial conditions and developments in European financial markets, as well as on the research of the transmission channels of ECB monetary policy to the Montenegrin economy, including its impact on domestic interest rates, lending activity, inflation, economic growth and financial stability.
The division also monitors and analyses European economic and monetary integration processes, the institutional framework and functioning of Economic and Monetary Union, the European economic governance framework, as well as the requirements and obligations associated with the CBCG’s future integration into the European System of Central Banks and the Eurosystem.
This work also encompasses the monitoring of methodologies, analytical standards and institutional requirements of the ECB and the ESCB, including preparations for future participation in relevant working groups and expert bodies, particularly in the areas of monetary policy, economic projections and economic modelling.
As part of its research activities, the division conducts applied and empirical economic research in the areas of monetary economics, monetary transmission, macroeconomic stability, economic growth, convergence, and the structural characteristics of the Montenegrin economy.
The division prepares expert analyses and research materials for the CBCG management on monetary and economic developments in the euro area, analyses relevant research and recommendations of international institutions and contributes to the formulation of the CBCG’s expert positions in the context of European integration processes.
The strategic priority of this organizational unit is to develop institutional expertise in monetary policy and European monetary integration and strengthen the CBCG’s research capacity in preparation for future participation in the analytical, research and advisory work of the ESCB and the Eurosystem.