Montenegro’s Bar municipality entered the second half of 2026 with strong revenues and almost €30 million in carried-over funds, while capital investment remained significantly below the pace planned in the annual budget.
The municipality spent €17.30 million, or 26.27%, of its €65.85 million annual budget during the first six months of 2026. Capital expenditure accounted for the largest gap, with only €5.16 million spent from a capital programme worth almost €38 million.
Revenue growth and cash carryover
Bar began 2026 with €29.67 million transferred from the previous year, giving it a substantial liquidity position. Excluding the carryover, first-half revenue increased 11% to €18.19 million. Property-tax revenue was particularly strong, rising 19.8% and reflecting continued growth in the municipality’s taxable property base.
Real-estate transfer-tax revenue moved in the opposite direction, declining 26.7%. The tax is more closely linked to property transactions, while property-tax collections reflect properties already within the tax system. The decline may reflect weaker transaction activity, changes in the timing of sales or a high comparative base, while the available figures do not establish whether Bar’s real-estate market is weakening.
Capital projects face administrative delays
The municipality attributed the slow implementation of capital projects to expropriation, unresolved property rights, incomplete project documentation and public-procurement procedures.
Only €5.16 million, or less than 14%, of the planned €38 million capital programme had been spent by mid-2026. Construction-related payments can be concentrated in the second half of the year, but the size of the difference between planned and executed spending means expenditure would have to accelerate considerably to approach the annual target. The situation leaves Bar with both substantial liquidity and an approved capital programme, while project readiness remains a constraint on implementation.
Infrastructure demand rises with tourism and construction
Bar’s economic activity includes tourism, maritime operations, trade and transport, while the Port of Bar remains part of Montenegro’s logistics strategy. Residential construction is also continuing, and tourism activity has strengthened. More than 1 million overnight stays were recorded from May through July, while cruise traffic is adding visitor flows through the port.
The increase in economic and tourism activity requires supporting investment in roads, parking, utilities, public spaces and municipal services. Private projects such as hotels, residential developments and logistics facilities also depend on supporting public infrastructure, including roads, water, wastewater and access connections.
Property revenues show different trends
The municipality’s strong property-tax performance provides a recurring revenue source, while the decline in transfer-tax collections points to a different trend in property transactions. The 26.7% reduction in transfer-tax revenue therefore represents a development to monitor alongside continued tourism and construction activity. At the same time, converting accumulated municipal funds into infrastructure remains relevant as demand for public services and supporting assets increases.
Bar has more available land than some more densely developed coastal municipalities and combines tourism with maritime activity, trade and transport. Low capital execution can limit the benefits of those structural characteristics if planned infrastructure projects remain delayed.
Project preparation determines spending pace
Bar’s almost €30 million carryover represents a substantial amount relative to its annual budget and provides fiscal resilience. At the same time, repeated accumulation of funds can occur when projects are included in budgets before expropriation, technical design and procurement have been fully resolved. This creates a distinction between the availability of financing and the ability to execute projects.
Bar’s first-half figures show that difference in the gap between the municipality’s €38 million capital programme and the €5.16 million actually spent by mid-year. Unless issues involving expropriation, project documentation and procurement are resolved, the municipality may continue carrying substantial funds into subsequent budgets while tourism, residential construction and other private activity continue to increase demand for public infrastructure.
