Montenegro Economic Outlook
May 12, 2020
With tourism revenues accounting for more than 20% of the country’s GDP, Montenegro’s economy is languishing under the global Covid-19 measures that have brought international travel to a near standstill. Moreover, merchandise exports plummeted in March on frail European demand, while remittance inflows are expected to plunge. In response to the crisis, on 24 April the cabinet approved a second EUR 75 million package that provides 70% wage subsidies to affected individuals. As Montenegro’s fiscal position has become even more precarious, S&P Global Ratings downgraded its outlook for the sovereign’s B+ credit rating to negative on 1 May. More positively, the government began to gradually reopen the economy starting 4 May, which should help revive activity.Montenegro Economic Growth
The outlook for this year is dismal: Protracted global travel restrictions will cripple the tourism sector this year, while infrastructure projects will likely be delayed. A ballooning fiscal deficit could further strain large debt financing needs, while mounting political tensions further dampen the outlook. FocusEconomics panelists forecast GDP to contract 6.5% in 2020, which is down 9.2 percentage points from last month’s estimate. In 2021, the economy is seen growing 5.2%.Montenegro Economy Data
| 2015 | 2016 | 2017 | 2018 | 2019 | |
|---|---|---|---|---|---|
| Population (million) | 0.6 | 0.6 | 0.6 | 0.6 | 0.6 |
| GDP per capita (USD) | 6,521 | 7,034 | 7,809 | 8,840 | 8,819 |
| GDP per capita (EUR) | 5,875 | 6,357 | 6,912 | 7,485 | 7,878 |
| GDP (USD bn) | 4.1 | 4.4 | 4.9 | 5.5 | 5.5 |
| GDP (EUR bn) | 3.7 | 4.0 | 4.3 | 4.7 | 4.9 |
| Economic Growth (GDP, annual variation in %) | 3.4 | 2.9 | 4.7 | 5.1 | 3.6 |
| Industrial Production (annual variation in %) | 7.9 | -4.4 | -4.2 | 22.4 | -6.3 |
| Unemployment Rate | 17.2 | 21.3 | 22.1 | 17.8 | 16.2 |
| Fiscal Balance (% of GDP) | -8.0 | -3.4 | -5.5 | -3.6 | -2.9 |
| Public Debt (% of GDP) | 66.2 | 64.4 | 64.2 | 70.1 | 77.2 |
| Inflation Rate (CPI, annual variation in %, eop) | 1.4 | 1.0 | 1.9 | 1.6 | 1.0 |
| Exchange Rate (vs USD) | 1.09 | 1.05 | - | - | - |
| Exchange Rate (vs USD, aop) | 1.11 | 1.11 | - | - | - |
| Current Account (% of GDP) | -11.0 | -16.3 | -16.2 | -16.8 | -15.4 |
| Current Account Balance (EUR bn) | -0.4 | -0.6 | -0.7 | -0.8 | -0.7 |
| Trade Balance (EUR billion) | -1.5 | -1.7 | -1.9 | -2.0 | -2.1 |
| Imports (EUR billion) | 1.8 | 2.0 | 2.2 | 2.5 | 2.5 |
| Exports (annual variation in %) | -7.6 | 6.2 | 9.0 | 14.0 | 6.7 |
| Imports (annual variation in %) | 3.5 | 12.0 | 11.7 | 10.8 | 1.8 |
| International Reserves (EUR) | 0.6 | 0.8 | 0.8 | 1.1 | 1.4 |
| International Reserves (USD) | 0.7 | 0.8 | 1.0 | 1.2 | 1.5 |
| External Debt (% of GDP) | 153 | 143 | 148 | 144 | - |
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Montenegro Facts
| Value | Change | Date | |
|---|---|---|---|
| Exchange Rate | 1.12 | 0.65 % | Dec 31 |
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