The European Bank for Reconstruction and Development has raised its growth forecast for Montenegro to 3.2 percent this year, up from the 2.7 percent projected in September. In its latest report, the EBRD also expects the Montenegrin economy to expand by 3.2 percent next year, while revising last year’s growth estimate upward to the same rate.
According to the report, real GDP increased by 3.2 percent year on year between January and September, maintaining the pace recorded in 2024. Strong investment activity and significant increases in wages and pensions helped offset the impact of higher electricity imports following the closure of the Pljevlja thermal power plant and a decline in exports.
However, the current account deficit widened as a growing trade gap outpaced a modest rise in the services surplus, while foreign direct investment slightly declined and remained concentrated in the real estate sector.
Inflation rose to four percent in December, driven by expansionary fiscal policy, strong wage growth and higher pensions. Fiscal pressures intensified during the year, with the budget deficit increasing as expenditures outpaced revenues, and public debt approaching 60 percent of GDP by September, partly financed through an 850 million euro Eurobond issuance. The EBRD projects steady growth of 3.2 percent in both this and next year, supported by progress in EU accession and infrastructure investment, but warns that weak fiscal buffers and limited economic diversification leave Montenegro vulnerable to external and climate related shocks.
