Montenegro’s economy recorded stronger domestic activity in the first five months of 2026, with employment, bank lending, industrial production and budget revenues all increasing compared with the same period last year. Average employment reached 276,500 people in January-May, representing a 5% increase year on year. Registered unemployment fell to a historical low of 7.84% in May.
Bank lending also continued to expand, with total loans increasing 12.3% year on year. Industrial production rose 10% during the first five months, while budget revenues were 8.2% higher than in the corresponding period of 2025. The figures indicate stronger activity in the domestic economy, supported by employment, credit growth and government revenue collection.
Merchandise exports and foreign investment decline
Developments in Montenegro’s external sector were considerably weaker during the same period. Merchandise exports fell 9.4% to €214.8 million in January-May, while imports increased 1.9% to €1.73 billion. Net foreign direct investment also declined. Montenegro recorded €119.3 million in net FDI during January-April, down 26.8% from the corresponding period. Tourism, traditionally an important source of foreign demand, recorded only moderate growth in the first five months. Tourist arrivals increased 0.9%, while overnight stays rose 1.1%.
Electricity generation drives industrial growth
The increase in industrial production was strongly influenced by developments in electricity generation. Electricity production increased 34.2% in the first five months of 2026, making a substantial contribution to the overall 10% growth in industrial production. The available figures show a particularly strong increase in electricity production rather than similarly broad-based expansion across the wider industrial sector.
Domestic activity contrasts with external performance
The different trends across domestic and external indicators have produced a clear divergence in Montenegro’s economic performance during the first part of 2026. Employment and bank lending are expanding, while industrial production and budget revenues have also increased. At the same time, merchandise exports and net foreign investment have declined, and tourism has recorded only limited growth in arrivals and overnight stays.
Fiscal revenues increased 8.2% from the corresponding period of 2025, although expenditure rose at a faster rate. The combination of these indicators places greater weight on domestic economic activity, including employment, household and corporate credit, public expenditure and electricity generation, while exports, tourism and foreign investment have provided less pronounced external momentum.
