Montenegro’s current-account deficit reached 20.9% of GDP in the four quarters to June 2026, compared with 18% a year earlier, according to the European Commission’s third-quarter report. The widening external imbalance remains a significant macroeconomic concern as the country’s investment activity expands.
The deterioration affected all major components of the external balance. The merchandise trade deficit increased to 44.7% of GDP, while the services surplus narrowed to 18.8%. The secondary-income surplus declined to 5% of GDP, and the primary-income balance fell to just 0.1%.
These figures indicate that the external gap extends beyond fluctuations in a single import category or a temporary weakness in tourism, reflecting the broader structure of Montenegro’s economy.
Trade data for the second quarter provided a more positive development. Real exports of goods and services rose 2.2% year on year, ending five consecutive quarters of decline, while imports increased by just 0.8%. Net exports contributed 0.3 percentage points to GDP growth, marking their first positive contribution since summer 2023.
Maintaining that improvement and turning it into a sustained reduction in the current-account deficit remain key challenges.
Foreign direct investment continues to provide an important source of external financing, amounting to approximately 6% of GDP. These inflows cover less than one-third of the current-account deficit. Foreign-exchange reserves stood at the equivalent of around three months of imports in June.
Montenegro’s use of the euro means it does not have an independent exchange rate that could be depreciated to restore competitiveness. Adjusting the external balance therefore depends on improvements in productivity, export capacity, tourism receipts, energy production and investment quality, alongside fiscal discipline.
For investors and lenders, the size of the deficit highlights the relationship between capital inflows and the economy’s capacity to generate future foreign-currency earnings. Montenegro can maintain a substantial external imbalance while investment inflows remain strong and investor confidence holds, but risks increase if investment fails to expand export revenues, financing conditions tighten or import demand grows faster than exports.
