Panorama econòmic

Economic indicators

As the smallest country in the Balkans, Montenegro has a relatively fragile economy that is transitioning to a market system and is based on financial investments, especially in the energy and tourism sectors (private investment accounts for around one-fifth of GDP). After recovering from the COVID-19 crisis, the Montenegrin economy grew by 6% in 2023, driven by strong consumption, tourism revenues surpassing pre-pandemic levels, and an influx of relatively affluent Russian and Ukrainian nationals due to Russia’s war in Ukraine. The strong growth from 2023 continued into 2024, although GDP growth moderated to 3.4%, driven primarily by private consumption and investments. Economic growth is expected to accelerate in 2025, driven by newly adopted policy measures (i.e. the new Fiscal Strategy) which are likely to boost private consumption and investment. However, this impact is anticipated to moderate in 2026. Medium-term growth is expected to remain steady, supported by progress towards EU membership (World Bank).

Regarding public finances, Montenegro's budget shifted to a USD 239 million deficit in 2024, compared to a USD 11 million surplus in 2023 (Ministry of Finance data), representing 3.2% of GDP. Budget revenue for 2024 increased by 7.3% year-on-year but was 0.6% below the plan, reaching USD 2.955 billion, or 37.8% of GDP. Tax revenue amounted to USD 2.13 billion, up from USD 1.78 billion in the same period of 2023. Budget expenditures in 2024 totalled USD 3.22 billion, or 41% of GDP, a 16.8% increase from 2023, but 0.7% below the plan. Last year's capital budget totalled USD 270 million, up 33% compared to 2023. Going forward, the general government deficit is expected to widen due to the significant increase in minimum wages, regular pension indexation, and lower revenue from halving pension contributions. Meanwhile, Montenegro's total public debt rose by USD 471 million in 2024 to USD 4.933 billion, or 61.32% of GDP, due to new debt issuance needed to accumulate reserves and prepare for the large Eurobond repayment in 2025. The country's net public debt (excluding the finance ministry's deposits and gold reserves) stood at USD 4.49 billion at the end of 2024, or 56.15% of GDP. Montenegro's consumer price inflation decelerated to 2.1% at the end of last year from 4.3% at the end of 2023. In 2025, consumer prices are projected to rise due to significant increases in wages and social transfers. Inflation is expected to ease in 2026, assuming no changes in current policies. Montenegro officially submitted its application to join the EU on December 15, 2008, with membership negotiations commencing on June 29, 2012. As of 2025, all of the 33 negotiating chapters have been opened, six of which have been provisionally closed (including three at the end of 2024). As per the IMF recommendations, enhancing infrastructure connectivity, promoting tourism in the Northern region, and expanding into niche tourism markets can diversify Montenegro's tourism sectors. Moreover, harnessing its natural resources in hydro, solar, and wind power will boost energy production and exports, supporting the country's climate objectives. Improved public investment management practices are essential to prioritize high-return investments in both physical and digital infrastructure. Additionally, implementing effective policies to curb informality will foster a favourable environment for the SME sector, allowing it to capitalize on skilled migrant labour.

In September 2024, the National Assembly adopted the Fiscal Strategy and the Europe Now 2 Programme. The implementation of Europe Now 2 led to a significant increase in minimum wages to an average of EUR 700, up from EUR 450. Employment growth continued across all sectors in 2024, with the unemployment rate falling to 14.1% (data from the World Bank). Job growth is expected to accelerate in 2025 due to reduced pension contributions, though this effect may weaken in 2026 as rising wages could slow job creation in the services sector. The country maintains a large informal sector, while the labour force participation rate remains low. Moreover, Montenegro is one of the poorest countries in Europe: according to the latest data available by the OECD, approximately 20.1% of the population is at risk of poverty or social exclusion. The country’s GDP per capita was estimated at USD 31,858 in 2024 by the IMF, half of the EU average.

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