Montenegro’s annual inflation rate remained at 3.6% in June, unchanged from May. Within the consumer price index, transport prices recorded annual growth of approximately 12.8%, up from 10.7% in the previous month. Food prices increased at a more moderate annual rate of around 2.1%.
Loan interest rates remain near 6%
According to data from the Central Bank of Montenegro, the weighted average effective interest rate on outstanding loans stood at 6.11% in May. The equivalent weighted average effective rate on newly approved loans was 5.98%. The statutory default interest rate applicable between 1 July and 31 December 2026 has been set at 10.40%.
Financing conditions vary across investment projects
Current financing conditions continue to affect projects with higher borrowing requirements, particularly in the tourism, real estate and construction sectors. Projects financed through short-term borrowing, residential presales or frequent refinancing remain exposed to prevailing commercial lending conditions, while developments backed by long-term development-bank financing or significant sponsor equity operate under different funding structures. Higher transport costs also increase operating expenses for tourism businesses, logistics companies and construction contractors through higher fuel, freight and employee commuting costs.
Public and private financing conditions differ
Montenegro’s current investment environment reflects different sources of financing across the market. Projects supported by sovereign financing, European Union funding and development-bank loans continue to access long-term capital, while many private-sector investors are financing projects at commercial borrowing costs of around 6%, alongside exposure to the 10.40% statutory default interest rate.
