Montenegro recorded an €18.07 million central budget deficit in June, despite collecting more revenue than initially planned, as recurrent spending remained high and capital expenditure fell short of budget expectations. Original budget and state-fund revenue totalled €249.54 million, equivalent to 2.90% of projected annual GDP. Revenue exceeded the monthly plan by 0.57% and was 10.46% higher than in June 2025. Consolidated expenditure stood at €267.61 million, or 3.11% of projected GDP. Spending was 3.26% below plan, although it was still 0.26% higher than a year earlier.
Tax Revenue Exceeds Monthly Plan
The June deficit was not driven by a general shortfall in tax collection. Taxes generated 78.92% of original revenue and exceeded the monthly target by 4.40%. Personal income-tax receipts were particularly strong, coming in €6.93 million above expectations. Value added tax provided the largest year-on-year increase. June VAT collections were €11.78 million higher than a year earlier, while revenue from the tax during the first six months increased by €36.57 million, or 6.07%.
Other tax-related categories recorded weaker results. Pension and disability contributions were €7.67 million, or 21.96%, below the June plan. Corporate income-tax receipts were also lower, falling €2.76 million, or 26.80%, compared with June 2025. Over the first six months, corporate income-tax revenue remained €4.87 million below plan.
Pensions and Wages Dominate Spending
On the expenditure side, pension payments reached €69.08 million, while gross public-sector wages amounted to €60.71 million. Together, the two categories represented almost half of consolidated expenditure for June, leaving a substantial portion of spending committed to recurrent obligations. Capital expenditure again recorded weaker execution. Capital spending was €12.50 million below the monthly plan and €14.83 million lower than in June 2025.
The weaker execution contributed to overall expenditure remaining below budget. At the same time, the lower capital outturn reflected delayed investment rather than a reduction in recurrent spending commitments. The June deficit amounted to 0.21% of projected GDP.
Capital Spending Remains Below Expectations
The composition of June’s fiscal result places particular emphasis on the gap between current expenditure and planned investment. Lower infrastructure spending can improve the immediate budget balance when projects are delayed, while leaving investment obligations and associated costs for subsequent periods. It can also limit the capacity to absorb EU funds and address transport, energy and municipal infrastructure bottlenecks.
The fiscal figures show higher tax collection alongside substantial recurrent expenditure and weaker-than-planned capital execution. Montenegro therefore recorded a monthly deficit even though total revenue exceeded the June target, with pensions and public-sector wages accounting for a large share of expenditure and capital investment remaining below planned levels.
