Montenegro Economic Forecast

Montenegro Economic Outlook

October 5, 2021

The economy expanded 19.0% year-on-year in Q2, after contracting 6.5% in Q1. The rebound came on the back of steep growth in private consumption, capital investment and exports of goods and services. Public consumption growth cooled, however. Household spending benefited from softer Covid-19 restrictions, likely offsetting the impact of a higher unemployment rate in the quarter. Turning to Q3, early data paints a bright picture. In July, industrial output swung to expansion on an annual basis for the first time since March, on the back of strengthening output growth in the manufacturing sector. Moreover, retail sales expanded at a record pace in the same month and the unemployment rate decreased through August, suggesting that household spending remained healthy in the quarter, despite another drop in real wages in July.

Montenegro Economic Growth

The economy is set to recover some of last year’s losses this year, before growth cools somewhat in 2022, partly due to a less favorable base effect. A progressing vaccination drive should see domestic and foreign demand firm next year, although lingering uncertainty over the course of the pandemic continues to cloud the outlook. FocusEconomics panelists forecast GDP to grow 8.0% in 2021. In 2022, the economy is seen expanding 5.4%, which is down 0.4 percentage points from last month’s forecast.

Montenegro Economy Data

2015 2016 2017 2018 2019
Population (million)0.60.60.60.60.6
GDP per capita (USD)6,5217,0347,8098,8408,819
GDP per capita (EUR)5,8756,3576,9127,4857,878
GDP (USD bn)4.14.44.95.55.5
GDP (EUR bn)3.74.04.34.74.9
Economic Growth (GDP, annual variation in %)3.42.94.75.13.6
Industrial Production (annual variation in %)7.9-4.4-4.222.4-6.3
Unemployment Rate17.221.322.117.816.2
Fiscal Balance (% of GDP)-8.0-3.4-5.5-3.6-2.9
Public Debt (% of GDP)66.264.464.270.177.2
Inflation Rate (CPI, annual variation in %, eop)1.41.01.91.61.0
Exchange Rate (vs USD)1.091.05-  -  -  
Exchange Rate (vs USD, aop)1.111.11-  -  -  
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)1.82.02.22.52.5
Exports (annual variation in %)-7.66.29.014.06.7
Imports (annual variation in %)3.512.011.710.81.8
International Reserves (EUR)0.60.80.81.11.4
International Reserves (USD)0.70.81.01.21.5
External Debt (% of GDP)153143148144-  

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Montenegro Facts

Value Change Date
Exchange Rate1.120.65 %Dec 31

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