Montenegro’s economy continued to expand in the first quarter of 2026, supported by investment, household consumption, employment growth and bank lending, while the latest monthly macroeconomic report also highlighted continued pressure from a weak goods-export base and a growing reliance on imports.
Real GDP growth reached 2.6 per cent in the first quarter of 2026. The largest contributions came from gross fixed capital formation, which increased 7.8 per cent, and private consumption, which rose 6.8 per cent. The figures show that economic activity was supported by both investment and domestic demand.
Montenegro’s GDP per capita measured by purchasing power standards reached 54 per cent of the EU average in 2025, according to the report. The level was above Serbia at 52 per cent, Albania and North Macedonia at 43 per cent, and Bosnia and Herzegovina at 36 per cent. The labour market continued to strengthen during the first four months of 2026. Average employment reached 273,000, representing a 4.3 per cent increase compared with the same period a year earlier. The registered unemployment rate declined to 8.49 per cent in April, the lowest level recorded to date.
Average net wages stood at €1,027 in January-April 2026, increasing 2.3 per cent year on year. The average pension reached €556.88 in April, up 3.3 per cent compared with April 2025. Annual inflation was recorded at 3.6 per cent in May, while average inflation during the first five months of the year was 3.2 per cent. Food and non-alcoholic beverages were the largest contributors, adding 0.90 percentage points, followed by transport with a contribution of 0.68 percentage points.
Budget revenues exceed expectations
Montenegro’s public finances remained among the stronger areas covered by the report. Budget revenues totalled €971.3 million in January-April, equivalent to 11.3 per cent of estimated GDP. Revenues increased by €73.8 million, or 8.2 per cent, compared with the same period last year and exceeded the government plan by €32.7 million, or 3.5 per cent. VAT, excise duties and contributions provided the largest contribution to revenue growth.
Budget expenditure reached €996.3 million during the same period, representing 11.6 per cent of estimated GDP. Spending was 7.1 per cent higher year on year but remained 12.7 per cent below plan. The budget deficit for January-April amounted to €25 million, or 0.29 per cent of estimated GDP. Current spending generated a surplus of €43.75 million, equal to 0.5 per cent of GDP, while the primary surplus reached €55.2 million. In April alone, the state budget recorded a surplus of €98.9 million, equivalent to 1.2 per cent of GDP.
Banking sector expands lending
Montenegro’s banking sector recorded continued credit growth, although bank profitability weakened. Banks reported net profit of €41.54 million in April, down 13.6 per cent compared with the previous year. Total loans reached €5.6977 billion, increasing 13.3 per cent year on year. Corporate lending rose 18.1 per cent to €2.0269 billion, while household loans increased 19.2 per cent to €2.5203 billion. Newly approved loans totalled €867.5 million, up 11.5 per cent, while deposits increased 3.7 per cent to €5.8654 billion. The average effective interest rate on newly approved loans declined to 5.75 per cent, 0.36 percentage points lower than in April 2025.
Tourism remains a key economic sector
Tourism continued to represent an important source of economic activity. Collective accommodation facilities recorded 237,830 tourists and 561,412 overnight stays in the first four months of 2026.
Foreign overnight stays were led by visitors from Serbia, which accounted for 14.8 per cent of the total. Germany followed with 9.2 per cent, the United Kingdom with 8.3 per cent, France with 6.9 per cent, Albania with 6.5 per cent, Turkey with 5.2 per cent and Russia with 5.1 per cent.
Goods exports decline while imports increase
The external trade data remained the main area of weakness. Total foreign trade in goods reached €1.5127 billion in January-April, down 0.6 per cent compared with the same period last year. Exports decreased 12.5 per cent to €175.6 million, while imports increased 1.2 per cent to €1.3371 billion.
The decline in exports was driven by reductions in other transport equipment, which fell 80.4 per cent, bauxite ore, down 36.4 per cent, and pharmaceutical products, down 21.6 per cent. Imports were led by machinery and transport equipment, which reached €331.3 million. Within this category, road vehicles accounted for €129.8 million. Food products followed with €249.6 million, while manufactured goods totalled €204.1 million.
Investment costs remain below EU average
Eurostat data included in the report showed Montenegro’s investment price-level index at 68 in 2025. This indicated investment costs 32 per cent below the EU average and placed Montenegro among the countries with the most favourable investment cost levels in Europe. Serbia recorded an index of 73, Albania and North Macedonia both recorded 72, Bosnia and Herzegovina recorded 68, while Croatia had an index of 73.
The report also included international economic projections. The OECD expects global growth to slow from 3.4 per cent in 2025 to 2.8 per cent in 2026 before increasing to 3.1 per cent in 2027. Eurozone growth is projected at 0.8 per cent in 2026 and 1.2 per cent in 2027. Montenegro’s latest macroeconomic data show continued economic expansion, supported by investment, employment, fiscal revenues and credit growth, while foreign trade figures show that exports remain significantly below import levels.
