Although Montenegro’s economy has achieved an average annual growth rate of 2.78% over the past 18 years, structural weaknesses such as high import dependency and the dominance of low-productivity services continue to slow development. These key points were highlighted by Maja Baćović, Associate Professor at the Faculty of Economics in Podgorica, during the Second International Conference on Economy and Business (MICEB 2025) held in Budva.
Baćović presented macroeconomic projections for 2025–2028 based on three models: aggregate demand, production function, and ARIMA inflation forecasting. She emphasized that while citizens’ living standards have improved, growth remains limited by the economy’s structure, characterized by a dominant service sector—especially tourism—with low technological advancement and slow productivity growth.
Four scenarios for 2025 project GDP growth between 2% and 3.36%, depending on investment intensity and tourism season outcomes. The most realistic scenario forecasts a 2.91% growth rate, aligning with estimates from international institutions like the IMF, World Bank, and EBRD.
Baćović also warned about declining investment activity, which has dropped from around 25% to 20% of GDP, and rising public sector employment, both factors reducing overall labor productivity. Montenegro’s import dependency stands at 66%, meaning domestic consumption growth does not sufficiently stimulate local production.
Tourism remains a critical factor for both economic growth and macroeconomic stability. A decline in tourism revenues in 2024 compared to the previous year has already impacted the economy, making the outcome of the upcoming season crucial for achieving 2025 projections.
At the same conference session on Southeastern Europe and Montenegro in 2025, Velimir Bole from the Economic Institute in Ljubljana noted Montenegro’s surprising resilience to global shocks—including the pandemic, supply chain disruptions, energy crises, the war in Ukraine, and inflationary pressures.
Bole pointed out that Montenegro’s GDP contraction during the pandemic was almost twice as severe as in other Southeast European countries and the euro area, but the subsequent recovery was stronger. By 2022, Montenegro’s economic activity matched euro area levels, and by 2024 it reached those of Southeast European peers.
Similarly, exports experienced a sharp pandemic-related decline—three times greater than in the euro area—but recovered by 2021 and surpassed pre-pandemic levels by 2024, outperforming regional and euro area benchmarks.
Consumer spending in Montenegro has shown robust and sustained growth since 2022, outpacing that of the euro area and neighboring countries. Bole attributes this to significant structural changes in consumption patterns.
