The Ministry of Finance of Montenegro has lowered its real GDP growth forecast for 2025 to 3.5%, a significant reduction from last year’s projected 4.8% outlined in the Fiscal Strategy presented in Villa Gorica.
Economist Miloš Vuković described this revision as an official acknowledgment of the previous strategy’s failure, noting that the government underestimated the slowdown by over a quarter while keeping other parameters unchanged.
The updated medium-term macroeconomic and fiscal policy guidelines, approved by the government led by Milojko Spajić and proposed by Finance Minister Novica Vuković, project Montenegro’s economy to grow on average 3.1% annually between 2025 and 2028. Growth rates for the subsequent years are forecast at 3.1% (2026), 3.0% (2027), and 3.2% (2028).
Key growth drivers include continued dynamic private consumption fueled by increases in minimum and average wages, intensified investment cycles, stable and low inflation, and increased infrastructure spending from the approved capital budget for 2025. Structural reforms outlined in the Reforms Agenda are expected to enhance competitiveness and economic sustainability.
Inflation is projected at 2.3% over the next three years, while net exports are expected to negatively impact GDP growth by about one percentage point due to rising imports and declining exports, especially linked to reduced electricity exports during the Pljevlja Thermal Power Plant reconstruction.
The labor market is expected to improve, with employment growth averaging 2.1% annually in the medium term.
Private consumption growth is forecast to average 2.4% annually from 2026 to 2028, following a strong 6.1% increase anticipated in 2025, supported by tax and fiscal reforms, rising minimum wages and pensions, credit growth, employment gains, and increased remittances.
Public spending is projected to grow at an average annual rate of 2.3%, driven by ongoing budget expenditures and capital investments.
