Montenegro’s retail sector recorded strong growth in the first half of 2026, with turnover increasing despite a decline in real wages, supported by higher employment, tourism-related demand, remittances, credit activity and spending by foreign residents. Retail turnover increased 7.4 per cent in current prices compared with the first six months of 2025. In June, retail activity recorded further acceleration, with nominal turnover rising 9.5 per cent year on year, while real turnover increased 6.1 per cent after adjusting for price changes.
Tourism season boosts consumer activity
Retail turnover between May and June increased 19.5 per cent in nominal terms and 18.5 per cent in constant prices. The increase coincided with the beginning of the main tourism season, which contributed to stronger demand for food products, fuel, household goods, clothing, hospitality supplies and other consumer items. Tourism activity also supports retail through purchases made by hotels, restaurants and private accommodation providers, as well as spending by visitors in supermarkets, fuel stations, pharmacies, shops and transport services.
Employment growth supports household spending
The expansion of retail activity occurred despite weaker wage dynamics. Average nominal net wages increased only 1.2 per cent during the first half of 2026, while real net wages declined 2 per cent due to faster growth in consumer prices. At the same time, employment increased 5 per cent, expanding the number of households receiving income from employment.
Higher consumption increases import demand
The growth in retail activity is closely linked with Montenegro’s dependence on imported goods. The country imports significant quantities of vehicles, fuels, pharmaceuticals, electrical equipment, consumer goods, food and beverages. As a result, stronger retail demand contributes to higher imports and affects the country’s merchandise trade balance.
During the first half of 2026, imports increased to €2.18 billion, while goods exports declined to €261.4 million. Retail expansion can therefore occur without a comparable increase in domestic production capacity, as distributors meet additional demand through imported products.
Retail growth supports financial sector activity
Sustained consumer activity supports card payments, consumer lending, working-capital financing and demand for commercial property. At the same time, banks and businesses remain exposed to households and companies whose income depends on tourism and real estate activity. Changes in tourism performance, foreign investment flows or credit conditions could influence consumption patterns.
Real sales growth exceeds price effects
The increase in real retail turnover during June indicates that higher activity was not solely the result of price increases. Consumers purchased a larger volume of goods after removing the impact of inflation. The difference between rising consumption and declining real wages depends on continued employment growth, borrowing capacity and external income sources. Montenegro’s retail sector recorded continued expansion in the first half of 2026, while the structure of demand remained closely linked to imports and external sources of economic activity.
