According to the European Commission’s latest spring economic forecast, Montenegro’s economy is expected to grow by 3 percent in 2025 and 3.2 percent in 2026.
The slowdown in 2024 was mainly due to weaker exports, while private consumption and recovering investments supported overall economic activity.
Recent measures, such as raising the minimum wage and reducing pension contributions under the “Europe Now 2” program, are expected to support GDP growth in 2025, but also contribute to higher inflation.
These policies are likely to reduce budget revenues and increase spending, leading to a wider budget deficit and higher public debt in 2025 and 2026.
Private consumption is expected to grow in 2025 but weaken in 2026, while investment growth will likely continue, driven by large-scale road and rail infrastructure projects.
Export levels are projected to decline this year due to the planned temporary shutdown of the Pljevlja thermal power plant.
Employment is expected to rise moderately in 2025 due to lower pension contributions and new investments, but this trend may slow in 2026 as wage increases put pressure on job creation in the service sector.
Inflation slowed last year due to lower food and energy prices, but core inflation (excluding food and energy) remained high at around 5 percent. It is expected to remain at similar levels in 2025 due to domestic price pressures, while imported inflation may decline. A moderate inflation rate is forecast for 2026, assuming no major policy changes.
