Key developments and challenges

Montenegro’s infrastructure is gradually improving, but further development is needed to support the expanding tourism industry. A greater private sector involvement in roads and municipal services could help to accelerate this process.

Further steps were made in the government’s privatisation programme, notably through the sale of a minority stake in EPCG, the state-owned power utility. The challenge now is to complete restructuring in this sector in order to bring about much-needed improvements in electricity supply and efficiency.

The collapse in output last year has highlighted the fragility of the banking system and the vulnerability of the economy to weaknesses in a few key sectors. Achieving sustainable growth will require a more diversified economy, the resumption of credit growth and greater emphasis on improving standards of governance and removing barriers to doing business.