Montenegro’s economic growth is projected to moderate from 3.0% in 2026 to 2.8% in 2027, while its current-account deficit is expected to remain close to one-fifth of GDP, according to the International Monetary Fund (IMF). The forecasts highlight the country’s continued reliance on tourism receipts, foreign investment and external financing.
The IMF expects average inflation to reach 3.5% in 2026 before easing to 3.3% in 2027. Meanwhile, the current-account deficit is projected to narrow from an estimated 20.6% of GDP in 2025 to 19.7% in 2026 and 19.0% in 2027.
External Imbalance Remains a Key Economic Vulnerability
The projected deficit reflects Montenegro’s continued dependence on external sources of financing, as the country imports considerably more goods, services and capital than it generates through exports and external income. Tourism receipts provide an important offset to the imbalance, but foreign capital, property investment and borrowing remain significant sources of financing for the remaining gap.
This dependence is particularly relevant as Montenegro faces substantial sovereign debt refinancing requirements while expanding public investment. The scale of the external deficit remains an important indicator of the economy’s resilience to changes in foreign financing conditions.
Growth Forecasts Converge Around 3%
The IMF’s growth projection is more cautious than estimates from other international financial institutions. The World Bank has raised its forecast for Montenegro’s economic growth in 2026 to 3.3%, while the European Bank for Reconstruction and Development (EBRD) expects expansion of approximately 3.1%.
Although the projections differ, all three institutions anticipate growth of around 3%, rather than a return to the stronger expansion recorded during the post-pandemic tourism recovery. Moderate economic growth should continue supporting government tax revenues, but it also leaves less fiscal room to accommodate permanent increases in wages, pensions and other recurring public expenditure. Montenegro is simultaneously increasing infrastructure investment, preparing for costs associated with EU accession and managing a substantial sovereign refinancing cycle.
Foreign Investment Composition Matters for External Stability
Foreign direct investment can finance a current-account deficit without generating immediate financing pressure, but the composition of those inflows remains important. A substantial share of Montenegro’s foreign investment continues to go into real estate, rather than export-oriented businesses or industrial production. Such investment supports construction, consumption and domestic tax revenues but contributes less directly to expanding the country’s capacity to generate foreign-currency earnings through exports.
Export-Oriented Investment and Economic Diversification
Montenegro’s medium-term challenge extends beyond maintaining GDP growth. Reducing the external imbalance requires a broader base of export-generating investment capable of increasing foreign-currency earnings. Relevant sectors include energy, industry, transport, digital services and higher-value tourism. Expanding investment in these areas would address the limited export-generating capacity associated with an economy in which foreign investment remains heavily concentrated in real estate, while the current-account deficit is projected to stay exceptionally high relative to GDP.
