Montenegro has experienced a worsening trade deficit in the first half of the year, with the shortfall increasing by 200 million euros compared to the same period last year. This surge is primarily due to a decrease in electricity exports. Experts are calling for a boost in the real sector and production to mitigate reliance on a few key exports—electricity, aluminum and wine—as well as tourism revenue, which has not met expectations this year.
To address the elevated trade deficit, Montenegro needs to enhance its production. The deficit in the first half of this year is 200 million euros higher than in the previous year. The country has seen an increase in machinery imports while electricity exports have decreased by 120 million euros.
“Montenegro’s export sector, including both goods and services, is heavily dependent on a limited range of products. This reliance can negatively impact the national balance of payments and overall economy. For example, during drought conditions, we experience a drop in goods exports since electricity production mainly relies on hydroelectric power,” explained Danijela Vukajlović-Grba from the Central Bank.
Analyst Oleg Filipović emphasized that Montenegro’s economy remains dependent on imports, a few key industries, and a limited range of export products. A strategic plan is needed to address the deficit over the long term.
“Even with the best tourism season and the highest tourism revenues, Montenegro cannot afford to rely solely on one industry to cover its deficit,” Filipović said.
The trade deficit has resulted in a current account shortfall of 434 million euros in the first quarter. This deficit is being offset by tourism revenue, foreign direct investments, and remittances from abroad.
“Over the past 18 years, Montenegro has received close to 14 billion euros, which equates to approximately two years of the country’s GDP. The majority of these funds have been invested in the hospitality industry,” Vukajlović-Grba noted.
Filipović also stressed the importance of developing the industrial sector, particularly aluminum production, and called for reforms and credible investors who are interested in more than just real estate. For the steelworks, guarantees and a robust business plan are necessary.
“We need to optimize the benefits of the Aluminum Plant, influence its investments in production processes, and enhance its competitiveness compared to other companies,” Filipović added.
Wine is Montenegro’s third-largest export product, accounting for 2% of total exports. Last year, Plantaže exported products valued at approximately 13 million euros.
“Exports increased by 10% over the first seven months of this year compared to the same period last year, thanks to ongoing improvements in existing markets and efforts to enter new ones,” said Marija Gašović from Plantaže.
The Chamber of Commerce also underscores the need for economic diversification.
“Structural changes aimed at developing industry and agriculture must be a priority to reduce the deficit,” stated the Chamber.
Addressing critical issues facing Montenegro’s economy—such as labor shortages, the informal economy, inefficient public administration, and fiscal challenges—is crucial, according to the Central Bank.
