Montenegro’s current-account deficit widened to 20.5% of GDP in 2025, from 17.1% in 2024, and reached 21.1% by the second quarter of 2026, the European Commission’s latest economic assessment showed. Net foreign direct investment (FDI) covered less than one-third of the deficit in 2025, leaving the country with a financing gap to address over the long term.
Rising merchandise imports and weaker external trade performance drove the deterioration. Goods imports increased 9.4% in 2025, while domestic exports remained concentrated in a narrow range of products, including electricity and mineral fuels. Montenegro’s growth model, supported by tourism, consumption and foreign real estate investment, has faced limitations as the external financing gap widened.
Net FDI amounted to approximately 6.5% of GDP in 2025, while total FDI inflows increased 14%. About half of those inflows went to real estate, alongside substantial intercompany borrowing. Net FDI remained equivalent to approximately 6.1% of GDP in the four quarters ending June 2026.
The composition of investment matters because property purchases do not necessarily create the same long-term export capacity as manufacturing, energy infrastructure, technology or internationally traded services. Real estate investment can support construction employment, domestic consumption and tax receipts, but can also increase demand for imported building materials, equipment and household goods.
The European Union is Montenegro’s principal international commercial partner. It accounted for 43.3% of merchandise imports and 32.5% of exports in 2025, while EU investors represented approximately 32.8% of FDI inflows. Investors from Serbia, Türkiye and the United States followed EU investors among the sources of FDI.
Montenegro’s GDP per capita, measured in purchasing power standards, reached approximately 54% of the EU average in 2025. The assessment identified export-oriented industries and productivity-enhancing infrastructure as priorities, with energy, industrial processing, digital services, transport and higher-value tourism among potential areas to diversify foreign earnings. The central challenge is turning foreign capital into productive investment that reduces import dependence and strengthens the country’s ability to finance its external deficit over the long term.
