Montenegro’s economy expanded 3.8% year on year in the second quarter of 2026, accelerating from the first quarter as investment strengthened and activity increased in tourism-related services, industry, construction and real estate. Gross domestic product reached €2.146 billion from April through June, compared with €2.008 billion a year earlier, according to preliminary data from statistics office MONSTAT. Nominal GDP rose 6.9%, representing an increase of around €138 million.
Real growth accelerated from approximately 2.6% in the first quarter, marking the strongest result over the latest six-quarter period. The increase came ahead of the main summer tourism season, while the economy continued to show a significant dependence on imports.
Fixed investment gains a larger role
Total gross investment amounted to €624.4 million, increasing 7.6% in nominal terms from the second quarter of 2025. Gross fixed capital formation rose more strongly, by 11.6% to €530.3 million, compared with €475.1 million a year earlier. Its share of GDP increased to 24.7%, from 23.7%.
Montenegro is undergoing an investment cycle covering luxury hotels, residential property, renewable energy, electricity networks, transport infrastructure and tourism facilities. Foreign capital remains important in coastal real estate, while EPCG, CGES and private investors are preparing wind, solar and grid projects.
Consumption continues to support activity
Final consumption expenditure reached €2.161 billion during the quarter. Household consumption rose 5.6% in nominal terms to €1.761 billion, while government consumption increased almost 8% to €369.9 million. MONSTAT separately reported average net monthly wages of €1,037 in July, up 2.3% year on year.
Higher household incomes continue to support retail, services, restaurants and property demand. However, stronger consumption also increases demand for imported vehicles, electronics, food, machinery and other goods, limiting its contribution to the external balance.
External deficit remains substantial
Exports of goods and services increased 4.4% in nominal terms to €791.7 million in the second quarter. Imports grew 4.5% to €1.431 billion. The resulting negative balance stood at €639.1 million, around €29 million wider than in the same quarter of 2025. Relative to GDP, the deficit was approximately 29.8%, compared with 30.4% a year earlier. Preliminary January-July merchandise data showed imports of around €2.61 billion, against exports of €312.9 million. Goods exports therefore covered only about 12% of imports.
Tourism-related services remain the largest segment
Wholesale and retail trade, transport, storage, accommodation and food services generated €568.7 million in gross value added during the quarter, up 7.6% nominally from a year earlier.
The figures underline the importance of tourism and related services to Montenegro’s economy. Activity remains concentrated around the summer season, while conference, wellness, luxury and other higher-spending segments are being targeted to extend tourism into spring and autumn. Tourism also generates significant import demand, as hotels and restaurants purchase food, beverages, equipment and other goods from abroad.
Industry records double-digit nominal growth
Mining, manufacturing, energy and water supply generated €166.9 million in gross value added, an increase of 17.6% in nominal terms. The figure does not represent a 17.6% real increase, as sector values reported by MONSTAT are measured at current prices. Nevertheless, industry recorded a stronger nominal contribution despite remaining considerably smaller than the service economy.
Montenegro is expanding wind and solar capacity and has a direct subsea electricity connection with Italy. Projects involving EPCG, CGES and private investors could strengthen electricity exports and reduce imports during periods of weak hydrology.
Construction and property activity remains strong
Real-estate activities generated €151.5 million in value added, up 11.2% nominally year on year. Construction generated a further €78 million, representing growth of 6.3%. The property market remains particularly active along the coast and in Podgorica. Foreign buyers continue to contribute to demand, while developments such as Porto Montenegro, Luštica Bay and Portonovi have contributed to significantly higher prices in parts of the market.
MONSTAT recorded 257 building permits in the second quarter, indicating continued activity in the development pipeline. Property investment contributes to construction, taxes and foreign capital inflows, although residential development does not necessarily increase export capacity or labour productivity. Investment in infrastructure, energy and productive businesses can provide recurring foreign income.
Growth coincides with EU accession preparations
The stronger second-quarter performance comes as Montenegro advances toward European Union membership. Sustained growth close to 4% could support income convergence with the EU, while higher productivity, greater scale among domestic companies, diversified exports, improved infrastructure and reduced dependence on seasonal tourism remain important factors for economic convergence.
EU membership could strengthen foreign investment and lower transaction costs, while also exposing Montenegrin businesses to greater competition within the single market.
Summer tourism becomes the next growth driver
The second quarter ended before the peak of the tourism season. July figures recorded 244,754 tourist arrivals and around 1.08 million overnight stays in collective accommodation. Performance in July, August and September will therefore have a significant effect on third-quarter GDP.
At the same time, Montenegro continues to face pressure from peak-season road congestion, rising housing costs and the large seasonal swings in demand for utilities and other infrastructure.
Economy enters second half with stronger momentum
The 3.8% second-quarter expansion represents an acceleration from the start of 2026, supported by stronger fixed investment, resilient consumption and continued activity in tourism-related services, industry, construction and real estate. The external deficit, however, remains large. Domestic demand continues to exceed domestic production of tradable goods, while merchandise exports remain a small proportion of imports. The second-quarter data therefore show stronger economic momentum alongside continued dependence on tourism, foreign capital and imported goods.
