The Montenegrin government said Thursday it would seek support from the International Monetary Fund, as it presented budgetary plans that aim to rein in its deficit to an acceptable level.
"The first option is an arrangement with the IMF," Finance Minister Igor Luksic told reporters, after the government adopted a 2010 draft budget that forecasts a public deficit of 4.2 percent of gross domestic product.
Despite the economic crisis in Montenegro, its government has so far been reluctant to turn to the IMF for aid, but Luksic said it had changed its mind since the global lender had agreed to ease its deficit requirements.
"The position has changed for negotiations with the IMF, which is now ready to tolerate a higher budget deficit," Luksic said.
He said an agreement with the IMF was not likely to into force before March 2010. In case of failure to reach an accord with the IMF, Montenegro will turn to other international financial sources, he added.
The budget, yet to be debated and passed by the parliament, is based on forecasts of 0.5 percent growth and 2.0 percent inflation in 2010.
Montenegro's economy -- tied heavily to tourism and associated property market speculation -- had flourished largely thanks to foreign investment since it declared independence from a loose federation with Serbia in mid-2006.
But its economy contracted by four percent in the first nine months of 2009.
