Economic analyst Mirza Mulešković predicts that prices in Montenegro will increase this year due to measures implemented to raise the minimum wage, which will also lead to higher service costs. This includes the introduction of new excise duties, an increase in tax rates, and mandatory fuel reserves required by the EU, which will raise fuel prices by about three cents. Additionally, the planned marking of fuel will add a cent or two to its price.
Mulešković explained that with wage increases, especially in the service sector, service prices (e.g., haircuts, beauty treatments) will rise as businesses adjust to the new living standards. He stressed that while wages have increased, they have not kept pace with real economic growth, citing that Montenegro’s living standards are still only around 51% of the EU average.
He also pointed out that government policies, especially from 2022 onward, have led to rising prices, with higher margins in the retail sector and increased fuel costs. The shift towards a consumption-driven economy, rather than one focused on production, has left the economy vulnerable.
Mulešković expressed concern over the sustainability of government spending, as the public sector now accounts for over 30% of employment, which is unsustainable for Montenegro’s small economy. He also highlighted the decline in foreign investments, mainly due to political instability, and criticized the government’s failure to diversify the economy.
The analyst also noted a 50 million EUR drop in tourism revenue, warning that Montenegro is not managing its tourism sector effectively. He emphasized the importance of creating new products to attract tourists and warned that Montenegro’s image has been damaged by poor infrastructure and high costs.
In conclusion, Mulešković advocated for strategic economic management, strengthening public administration efficiency, digitalization, and aligning education with market needs to improve the country’s economic future.
