Montenegro Economic Forecast

Montenegro Economic Outlook

May 10, 2022

Data for the first quarter paints a mixed picture. Goods export growth skyrocketed in the quarter, likely as the removal of Covid-19 restrictions in other European countries buoyed demand. Moreover, real wages grew at a rapid pace in Q1, which should offset mounting price pressures to an extent. On the other hand, growth in tourist arrivals and overnight stays cooled notably. Additionally, annual industrial output contracted on average in the first quarter. Meanwhile, in response to the war in Ukraine, the country proposed a fiscal stimulus in mid-March to ease the burden on households from rising energy prices, and adopted an unspecified sanction package against Russia in early April. Lastly, Parliament endorsed the minority United Reform Action-led government, after the previous coalition was toppled by a vote of no confidence earlier this year.

Montenegro Economic Growth

Economic growth will cool this year due to the fallout from Russia’s invasion of Ukraine and international sanctions against Russia. Russia is the largest foreign investment source for the country, and Montenegro’s tourism sector is heavily dependent on Russian tourists. The government’s fiscal stimulus and robust wage growth should support activity, however. FocusEconomics panelists forecast GDP to grow 3.9% in 2022, which is down 1.2 percentage points from last month’s forecast. In 2023, the economy is seen expanding 3.8%.

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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