Montenegro

Montenegro Economic Forecast

Montenegro Economic Outlook

Year-on-year GDP growth accelerated in Q2. The external sector supported the economy, while, on the domestic demand front, government expenditure expanded at a faster clip. That said, private consumption and fixed investment cooled. Turning to Q3, available data points to softening growth, although a strong summer tourism season should have supported activity to some extent. Economic sentiment averaged lower in Q3 than in Q2, weighed down by worsening sentiment in the construction, retail and services sectors. Additionally, inflation remained elevated in Q3. Moving to Q4, a further decline in economic sentiment in October hints at still-subdued growth dynamics. In politics, on 31 October, Parliament voted in a new broad-based coalition government led by Prime Minister Milojko Spajic of the centrist Europe Now party, whose priority will be European Union accession.

Montenegro Inflation

Inflation fell to 6.1% in October from September’s 7.9%, marking the lowest print since January 2022. Softer increases in prices for food and non-alcoholic beverages, furniture and household equipment, health, and education drove the result. Inflation should continue its downtrend from current levels next year, but protracted pass-through effects will keep it elevated.

This chart displays Economic Growth (GDP, annual variation in %) for Montenegro from 2013 to 2022.

Montenegro Economic Data

2018 2019 2020 2021 2022
Population (million) 0.6 0.6 0.6 0.6 0.6
GDP (USD bn) 5.5 5.5 4.8 5.9 6.2
GDP per capita (USD) 8,845 8,909 7,684 9,417 10,011
GDP (EUR bn) 4.7 5.0 4.2 5.0 5.9
GDP per capita (EUR) 7,497 7,959 6,740 7,966 9,524
Economic Growth (Nominal GDP, ann. var. %) 8.5 6.2 -15.5 18.4 19.6
Economic Growth (GDP, ann. var. %) 5.1 4.1 -15.3 13.0 6.1
Private Consumption (ann. var. %) 4.6 3.1 -4.6 4.0 9.7
Government Consumption (ann. var. %) 6.3 1.0 0.8 0.5 1.2
Fixed Investment (ann. var. %) 14.7 -1.7 -12.0 -12.3 -1.1
Industrial Production (ann. var. %) 23.6 -6.1 -0.9 5.7 -1.8
Unemployment (% of active population, aop) 18.7 15.3 19.1 22.4 17.8
Fiscal Balance (% of GDP) -3.6 -2.9 -10.2 -2.0 -4.4
Public Debt (% of GDP) 71.9 78.8 107.3 85.6 72.1
Inflation (CPI, ann. var. %, aop) 2.6 0.4 -0.3 2.4 13.0
Exchange Rate (USD per EUR, eop) 1.14 1.12 1.22 1.14 1.07
Exchange Rate (USD per EUR, aop) 1.18 1.12 1.14 1.18 1.05
Current Account Balance (EUR bn) -0.8 -0.7 -1.1 -0.5 -0.8
Current Account Balance (% of GDP) -17.0 -14.3 -26.1 -9.2 -12.9
Merchandise Trade Balance (EUR bn) -2.0 -2.1 -1.6 -1.9 -2.7
Merchandise Exports (EUR bn) 0.4 0.5 0.4 0.5 0.8
Merchandise Imports (EUR bn) 2.5 2.5 2.1 2.4 3.4
Merchandise Exports (ann. var. %) 14.0 6.8 -12.2 28.6 45.2
Merchandise Imports (ann. var. %) 10.8 1.8 -19.0 19.0 40.7
Foreign Direct Investment (EUR bn) 0.4 0.4 0.4 0.6 0.8
International Reserves (EUR bn) 1.0 1.4 1.9 1.7 1.9
International Reserves (months of imports) 4.9 6.5 11.0 8.2 6.8
External Debt (EUR bn) 6.8 7.7 9.2 8.9 -
External Debt (% of GDP) 146 155 221 180 -

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