Montenegro overview


In Montenegro we focus on:

Expanding the economic base through enhancing competitiveness. Although the Montenegrin economy grew rapidly in the pre-crisis period, this growth was unbalanced, driven by a credit-fuelled boom and the propping-up of old and uncompetitive industrial enterprises. The EBRD will support moves to a more balanced growth path through targeted support for small and medium-sized enterprises in all sectors with growth potential and through further strengthening of the financial system

Supporting sustainable tourism, property and associated environmental and infrastructure needs. Montenegro’s tourism sector is likely to be a major growth driver for the country. However, the institutional and infrastructure requirements to unlock this potential are not yet in place. The EBRD will support sustainable practices with strong emphasis on environmental sustainability. Where appropriate, private sector solutions, including Public Private Partnerships, will be sought.

Promoting energy security and efficiency and regional integration of energy markets. There is virtually no competition in this sector and commercial and technical losses in distribution are significant. Montenegro has the potential to become a regional energy hub in the medium to long term. The EBRD will support important interconnections with countries in the region and will invest in projects that improve energy security, advance energy efficiency and lead to greater competition in the energy market.

The EBRD’s latest Montenegro strategy was adopted on 6 November 2013

Current EBRD forecast for Montenegro’s Real GDP Growth in 2016 4.0%

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

In Montenegro, growth picked up in 2015 to an estimated 3.1 per cent (from 1.8 per cent in 2014), with the increase primarily driven on strong FDI inflows and progress on a major Chinese-financed highway project. The tourism sector also performed well in 2015, as a drop in Russian tourists was more than compensated by an increase from other countries, particularly in the Western Balkan region. We expect growth in 2016 to rise further to 4 per cent, as the construction of the highway enters the full swing, another well-booked tourism season, as well as increase private consumption supported by the recent increase in public sector wages, pensions, and social benefits, before falling back to around 3 per cent in 2017 as post-election government spending is tightened. More generally, a major downside risk lies in the fiscal side, and the worrying rise in public debt in recent years may necessitate austerity measures elsewhere, especially if economic growth rates were to falter.

Montenegro in the EBRD’s 2016-17 Transition Report