Montenegro Economic Forecast

Montenegro Economic Outlook

September 8, 2020

The economy likely reeled in Q2 from the full impact of Covid-19. Retail trade shrank markedly as restrictive measures limited consumers’ ability to spend. Moreover, an uptick in the unemployment rate will have further dented household consumption, and nosediving merchandise imports also hint at weakened domestic demand. The important tourism sector also suffered, with tourist arrivals virtually nonexistent. Early data for Q3 remains gloomy: Tourist arrivals fell sharply again in July, while another steep drop in imports suggests that domestic demand remained frail. Meanwhile, pro-Western President Djukanovic’s Democratic Party of Socialists lost its majority in the parliamentary elections held on 30 August. Subsequently, three opposition parties announced a coalition government but stressed that they would continue to work towards EU membership. As such, no major shift in economic policy is expected.

Montenegro Economic Growth

GDP is forecast to contract sharply this year due to Covid-19 and associated containment measures weighing heavily on domestic and foreign demand. Travel restrictions and concerns over going abroad are set to harm the tourism sector, while a higher unemployment rate will dent household spending and general uncertainty will weigh on business activity and expenditure. FocusEconomics panelists forecast GDP to contract 7.4% in 2020, which is unchanged from last month’s estimate. In 2021, the economy is seen growing 5.2%.

Montenegro Economy Data

2015 2016 2017 2018 2019
Population (million)
GDP per capita (USD)6,5217,0347,8098,8408,819
GDP per capita (EUR)5,8756,3576,9127,4857,878
GDP (USD bn)
GDP (EUR bn)
Economic Growth (GDP, annual variation in %)
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)
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)
Exports (annual variation in %)-
Imports (annual variation in %)3.512.011.710.81.8
International Reserves (EUR)
International Reserves (USD)
External Debt (% of GDP)153143148144-  

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Montenegro Facts

Value Change Date
Exchange Rate1.120.65 %Dec 31

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