Montenegro overview


In Montenegro we focus on:

  • Making the economy more competitive, integrated and green.
  • Using sustainable tourism as a lever for SME development and investment in related industries – such as agribusiness and sustainable municipal infrastructure – are the focal points in the document.
  • Working with the private sector to help it become more competitive including developing agribusiness value chains and backward linkages in the tourism sector. Connectivity and regional integration will be improved by expanding cross-border transport and energy links, in line with the Connectivity Agenda for the Western Balkans. And the green economy in Montenegro – which marks 25 years since proclaiming itself a “green state” – will be supported via sustainable tourism among other things.
  • Leveraging the country’s comparative advantages to develop agribusiness value chains, providing both investment and advice, to help Montenegro produce more local food for the tourism industry and decrease imports. Tourism – which is the main export product and growth driver in the country – is a big focus of the strategy which lists the following areas of potential EBRD engagement: “Upgrading the existing hotels stock through privatisation, addressing the seasonality issue by promoting development of congress tourism and health tourism facilities, and modernisation of related municipal and environmental infrastructure.

The EBRD’s latest Montenegro strategy was adopted on 3 May 2017

Current EBRD forecast for Montenegro’s Real GDP Growth in 2017 3.0%

Current EBRD forecast for Montenegro’s Real GDP Growth in 2018 3.3%

In Montenegro, 2016 economic growth, estimated at 2.5 per cent (compared to 3.4 per cent in 2015) was lower than expected. Investment in the major highway project, which is being mainly financed by loans from China, is among the key drivers of this growth. However, high imports related to the project fuelled the trade deficit and made a significant drag on growth, almost offsetting the positive gross capital contribution. At the same time, concerns about fiscal discipline grew in 2016, especially in the run-up to elections when there were significant increases in public sector wages and social benefits. However, steps have since been taken by the authorities since then to chart a path for fiscal consolidation. As electricity output grows following the production from the newly commissioned Krnovo wind power plants, and as the tourism sector is likely to be boosted by the newly operational airline connections with the EU countries, we expect growth in 2017 to rise to 3 per cent, and further to 3.3 per cent in 2018. However, the worrying rise in public debt in recent years, projected to exceed 80 per cent of GDP by 2018, may necessitate painful austerity measures elsewhere, especially if economic growth rates were to falter.

Montenegro in the EBRD’s 2016-17 Transition Report