Montenegro Economic Forecast

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)0.60.60.60.60.6
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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