(Incorporates MONTENEGRO-IMF, adds details)
By Adam Tanner
PODGORICA, March 11 (Reuters) - Montenegro's GDP will grow between zero and 2.5 percent this year, down from an earlier five percent projection, and the Adriatic country may ask the IMF for a stand-by loan, the finance minister said on Wednesday.
"Right now we are close to very slow growth of between zero and 2.5 percent," Finance Minister Igor Luksic, who is also a deputy prime minister, told Reuters in an interview.
"We think that the Montenegrin economy will still grow this year, but the fact is that day after day we get grimmer perspectives from the European economy and we are interdependent."
Between 2004 and 2008, the former Yugoslav state grew at an average rate of seven percent. With less revenue than projected and growth slowing considerably, the government is considering turning to the IMF for a stand-by loan, Luksic added.
Although economists have suggested Montenegro will eventually have to turn to the IMF as neighbouring Serbia and many other nations have done in recent months, government officials have in the past said they did not need the funds.
"In a bad scenario, we are going to have a communication with the IMF and see what are the possibilities," Luksic said. "We are going to see what other countries have done, what sort of stand-by arrangements other countries have forged and we are probably going to devise something to be on the safe side."
"We are probably going to communicate with the IMF to see what sort of an arrangement we could get and it is going to be standing by until the moment we think we should take it."
In a separate interview later on Wednesday, Vujica Lazovic, deputy prime minister for economic policy, said he saw his country seeking several hundred million euros if the economic crisis in Montenegro worsens.
"My prediction is that it will be 200-300 million euros," Lazovic told Reuters. "But we have still not decided to activate the programme."
He said Montenegro would first turn to European banks, with whom they have already had in depth talks, to help provide greater liquidity to the local banking sector.
NO CURRENCY RISK
Unlike Serbia, its partner until the dying days of Yugoslavia which has seen its dinar currency lose a quarter of its value in recent months, Montenegro has adopted the euro. The IMF loan would support its budget or bank sector, Luksic said.
"2009 is difficult but 2010 could be even more difficult," he said in the capital Podgorica, which was once known as Titograd. The economy is "probably stagnating right now."
The IMF has forecast 2009 growth in Montenegro, a nation of 650,000 famed for its scenic Adriatic coastline, at two percent.
One sign of difficulties came in poor government revenues in January and February of about 80 percent of projected levels.
"Financial outlooks were projected at very optimistic levels...assuming there was no crisis," Luksic said of a budget passed in December that expected 2009 growth of five percent.
Among the rough spots in its economy is the KAP aluminium smelter, the nation's biggest exporter. On Wedneday, the government offered KAP guarantees for a 20-million euro loan if Russian owners of the aluminium smelter dropped a case launched before a German arbitration court. (Editing by Ron Askew)