Montenegro’s GDP expanded 3.8% in the second quarter of 2026, supported by tourism and investment, after a subdued start to the year. The pickup comes as the country enters the final stretch of its European Union accession process, while its growth model becomes more reliant on domestic demand, imports and foreign capital.
Economic data show real GDP growth slowed to 2.7% in 2025 from 3.2% in 2024. Private consumption and investment carried the expansion, while net exports subtracted from growth. Goods exports declined and imports rose in 2025, with tourism making a mixed contribution.
Income convergence continued, with GDP per capita in purchasing-power terms reaching 54% of the EU-27 average in 2025, up from 43% in 2020. The increase marks a material improvement for a small Western Balkan economy. Deeper integration with the EU market and investment could accelerate convergence, while infrastructure investment and regulatory alignment provide a stronger platform for capital deployment.
The external financing gap widened as the current-account deficit reached 20.5% of GDP. Net foreign direct investment covered less than one third of the deficit. Government finances moved further into deficit as credit growth accelerated.
As Montenegro approaches greater exposure to competition in the EU single market, the policy challenge is to make growth more productive, export-oriented and fiscally sustainable. The next phase will depend on converting consumption-led expansion, property investment and tourism inflows into higher-value services, export capacity, energy investment and productive private-sector growth.
