For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.
As the smallest country in the Balkans, Montenegro has a relatively fragile economy that is transitioning to a market system and is based on financial investments, especially in the energy and tourism sectors (private investment accounts for around one-fifth of GDP). After being severely hit by the COVID-19 pandemic, the country’s economy rebounded in 2021 when GDP grew by 13%. In 2022 Montenegro continued its positive trend, supported by a recovery of the tourism sector and by private consumption (partly influenced by the increase in wages and social transfers), with an estimated growth rate of 7.2% (IMF). According to the projections of the IMF, the economy is expected to continue to grow this year and the next, albeit at a slower pace (2.5% in 2023 and 3% in 2024) given the impact of the war in Ukraine on an import-dependent country like Montenegro. Moderate growth is due to the restriction of private consumption caused by the high level of inflation and stagnating investments.
Concerning public finances, Montenegro generally registers a budgetary deficit. At the end of 2021, the government adopted an ambitious plan (Europe Now) to boost economic recovery. This included the abolition of health contributions, an 80% increase in the minimum wage, the introduction of new social benefits and an ambitious public investment programme. The reform prompted a decrease in fiscal revenues in 2022 and a budget rebalance was adopted in September which foresaw an increase in expenditures by EUR 191 million (or 7.7%). For 2023, the budget deficit is expected to rise to 4.75% of GDP, as a result of state subsidies aimed at mitigating the effects of the crisis that affected the rise in the cost of living (S&P). The debt-to-GDP ratio decreased from 86.6% in 2021 to 74.4% in 2022 and is expected to follow a downward trend over the forecast horizon, stabilizing around 70%. To consolidate public accounts, the Minister of Finance has indicated that a tax reform will be implemented between 2022 and 2023. Planned measures include the introduction of an income tax for legal entities, as well as a progressive income tax for individuals while increasing the gross monthly tax-free salary to EUR 700. Another matter of concern is the fact that most of the public debt is denominated in USD and the country has an external trade deficit of almost one-fourth of its GDP. Therefore, Montenegro is vulnerable to a decline in external demand, and its high financing needs expose the country to potential changes in risk aversion and disruptions in global financial markets. In March 2023, the credit rating agency Standard & Poor's confirmed Montenegro's stable outlook while maintaining a B/B rating. In 2022, high global energy prices and stronger internal demand drove inflation to 12.8% (from 2.4% one year earlier). According to IMF projections, the inflation rate in 2023 will be around 9.2% before it sows to 4.5% in 2024, although uncertainty remains. One of Montenegro’s main objectives is to join the European Union: the country acquired the official status of a candidate for membership in December 2010. To advance in the accession negotiations, it should demonstrate significant progress in several domains, including the rule of law, the fight against corruption and organised crime.
Although decreasing in recent years, the unemployment rate has been historically high. Data from Monstat show that as of the third quarter of 2022, unemployment affected almost 13% of the labour force (39,000 people out of an active population of 300,700). The country maintains a large informal sector, whereas the labour force participation rate remains low. Moreover, Montenegro is one of the poorest countries in Europe: according to the latest data available by the European Commission, almost 24% of the population is at risk of poverty or social exclusion. The country’s GDP per capita was estimated at USD 26,032 in 2022 by the IMF, 52% lower than the EU average.
|Main Indicators||2020||2021||2022 (E)||2023 (E)||2024 (E)|
|GDP (billions USD)||4.78||5.87||6.10||7.03||7.57|
|GDP (Constant Prices, Annual % Change)||-15.3||13.0||6.4||3.2||3.0|
|GDP per Capita (USD)||7,689||9,433||9,812||11,289||12,154|
|General Government Gross Debt (in % of GDP)||107.4||86.6||71.2||67.8||67.6|
|Inflation Rate (%)||-0.2||2.4||13.1||9.7||5.0|
|Current Account (billions USD)||-1.24||-0.54||-0.82||-0.79||-0.85|
|Current Account (in % of GDP)||-26.1||-9.2||-13.3||-11.2||-11.3|
Source: IMF – World Economic Outlook Database , Latest available data
Note: (e) Estimated Data
Montenegro has a labour force of 280,000 people out of its 619,000 population. Agriculture, which according to the latest data by the World Bank represents 6.5% of the GDP (roughly 60% livestock breeding and 40% cultivation) and 7% of the workforce, remains hampered by its outdated methods. Agricultural land accounts for 19% of the total land area (FAO), and the sector is dominated by small-scale family farms, with the average farm size being less than 5 hectares. In the coastal region which benefits from the Mediterranean climate, citrus and olive cultures are widespread, seasonable vegetables and tobacco can be found in the central parts, and the North benefits from the extensive sheep breeding. The main products exported are wine and beer, though the increased focus on tourism over the past decade has contributed to the waning of agriculture, increasing the country’s reliance on food imports. As Montenegro advances in the negotiations to join the EU, the country is working on the improvement of its agricultural sector as one of the EU pre-accession requirements.
Industry represents 14.8% of the country's GDP and employs 19% of the workforce. Its contribution to the economy has been declining in recent years. The steel and aluminium industry alone represents a good part of the country's exports and is expected to boost economic development. The manufacturing sector is still underdeveloped and accounts for only 4% of GDP. According to the national statistical institute, Montenegro's industrial output declined 3.3% year-on-year in 2022. In the same year, the output of the mining and manufacturing sectors increased by 8.9% and 0.3%, respectively, whereas the production of the utility sector fell by 10.8%.
The tertiary sector contributes 59.9% to the GDP and employs almost three-quarters of the workforce (73%). Tourism is the third-largest industry and consumes around one-third of total investment. It alone provides 20% of the GDP (EU Commission). The sector has been in full expansion in recent years, especially on the Adriatic Coast: every year Montenegro welcomes three times as many visitors as its total population. Unfortunately, this sector was heavily impacted by the COVID-19 pandemic but it showed signs of recovery in 2022 when the country welcomed 2.18 million tourists (of which 95.5% were foreigners – data Monstat). The country is seeking to improve its tourism infrastructure and develop its eco-tourism industry to exceed 30% of GDP by 2027. The government is trying to attract large foreign hotel chains that may provide hospitality standards similar to those in Europe. Montenegro's hotel infrastructure was underdeveloped, but with several huge infrastructure projects; the situation is beginning to change. On another hand, the county is also seeking to diversify its economy to be less dependent on tourism. Montenegro's banking sector is relatively small but growing rapidly and has undergone significant reform in recent years, with the government implementing a number of measures aimed at improving financial stability and increasing competition.
|Breakdown of Economic Activity By Sector||Agriculture||Industry||Services|
|Employment By Sector (in % of Total Employment)||7.2||19.4||73.4|
|Value Added (in % of GDP)||6.5||14.8||59.9|
|Value Added (Annual % Change)||-0.5||1.4||18.6|
Source: World Bank - Latest available data.
Find more information about your business sector on our service Market Reports.
|Euro (EUR) - Average Annual Exchange Rate For 1 MUR||0.03||0.03||0.02||0.03||0.02|
Source: World Bank - Latest available data.
Find out all the exchange rates daily on our service Currency Converter.
The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
Montenegro is a small country open to foreign trade, which represents around 105% of its GDP (World Bank, latest data available). In order to become a WTO member, Montenegro has established major trade policy reforms, which include the elimination of import quotas, the reduction of import licences and prohibitions, the streamlining of customs procedures and the elimination of tariff and non-tariff barriers. According to 2021 figures by Monstat, the country mainly exports non-ferrous metals (18.7%), electric current (14.7%), metalliferous ores and metal scrap (13.5%), and cork and wood (8%); while it imports chiefly petroleum oils (7.8%), medicament (6.2%) motor cars (5.9%), and electrical machinery (4.1%), even though imports are much diversified, reflecting the openness of the country and the weakness of its national production base.
The European Union as a whole is the main trading partner, accounting for 31.1% of total exports and 45.6% of imports (data Monstat 2021). Serbia (24.5%), Bosnia-Herzegovina (7.6%), Italy (5.8%), Kosovo (5.4%), and Slovenia (5%) are the main destinations of Montenegro’s exports, whereas imports come chiefly from Serbia (20%), Germany (9.2%), Italy (6.2%), Greece (5.9%), and Croatia (5.5%). Montenegro and the EU signed a Stabilisation and Association Agreement (SAA) on 15 October 2007, which is expected to ultimately lead Montenegro to become a member of the EU.
The country has a structural trade deficit: in 2021, Montenegro exported USD 515 million worth of goods against USD 2.9 billion in imports (+22.9% and +23%, respectively); whereas exports of services (at USD 1.8 billion) were higher than imports (USD 755 million – data WTO). In the same year, the trade deficit was estimated at 19.4% of the GDP (data World Bank). According to preliminary figures from Monstat, in 2022 the value of exports of goods was EUR 700.2 million and that of imports was EUR 3,5 billion. Compared to the same period one year earlier, exports increased by 60.2%, while imports rose by 41.3%. The coverage of import by export was 19.8% and it was higher compared to the coverage for the same period of the previous year (17.4%).
|Foreign Trade Indicators||2017||2018||2019||2020||2021|
|Imports of Goods (million USD)||2,613||3,010||2,909||2,402||2,956|
|Exports of Goods (million USD)||421||472||465||419||515|
|Imports of Services (million USD)||588||723||744||545||755|
|Exports of Services (million USD)||1,590||1,832||1,895||758||1,881|
|Imports of Goods and Services (Annual % Change)||8.4||9.2||2.7||-20.1||13.7|
|Exports of Goods and Services (Annual % Change)||1.8||6.9||5.8||-47.6||81.9|
|Imports of Goods and Services (in % of GDP)||64.5||66.7||65.0||61.0||62.2|
|Exports of Goods and Services (in % of GDP)||41.1||42.9||43.8||26.0||42.8|
|Trade Balance (million USD)||-2,110||-2,414||-2,311||-1,873||-2,262|
|Trade Balance (Including Service) (million USD)||-1,121||-1,319||-1,176||-1,669||-1,135|
|Foreign Trade (in % of GDP)||105.6||109.6||108.8||87.0||105.0|
Source: WTO – World Trade Organisation ; World Bank , Latest Available Data
(% of Exports)
|Bosnia and Herzegovina||12.9%|
|See More Countries||37.8%|
(% of Imports)
|See More Countries||51.2%|
Source: Comtrade, Latest Available Data
|0.7 bn USD of products exported in 2022|
|Unwrought aluminiumUnwrought aluminium||24.4%|
|Electrical energyElectrical energy||24.3%|
|Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses "incl. those in the form of transdermal administration" or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006)||4.7%|
|Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals||3.9%|
|Wood sawn or chipped lengthwise, sliced or peeled,...Wood sawn or chipped lengthwise, sliced or peeled, whether or not planed, sanded or end-jointed, of a thickness of > 6 mm||3.9%|
|See More Products||38.7%|
|3.7 bn USD of products imported in 2022|
|Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals||10.9%|
|Electrical energyElectrical energy||5.9%|
|Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702)||3.9%|
|Unwrought aluminiumUnwrought aluminium||3.2%|
|Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses "incl. those in the form of transdermal administration" or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006)||3.1%|
|See More Products||73.0%|
Source: Comtrade, Latest Available Data
To go further, check out our service Import Export Flows.
|1.9 bn USD of services exported in 2019|
|Personal travelPersonal travel||64.82%|
|Health-related expenditureHealth-related expenditure||0.47%|
|Education-related expenditureEducation-related expenditure||0.12%|
|Air transportAir transport||4.49%|
|Sea transportSea transport||3.90%|
|Miscellaneous business,...Miscellaneous business, professional, and technical services||6.20%|
|Legal, accounting, management...Legal, accounting, management consulting, and public relations||3.13%|
|Business and management...Business and management consulting and public relations services||2.77%|
|Legal servicesLegal services||0.24%|
|Accounting, auditing,...Accounting, auditing, bookkeeping, and tax consulting services||0.06%|
|Architectural, engineering,...Architectural, engineering, and other technical services||1.48%|
|Advertising, market research,...Advertising, market research, and public opinion polling||0.94%|
|Research and developmentResearch and development||0.41%|
|Other business servicesOther business services||0.24%|
|Operational leasing servicesOperational leasing services||0.30%|
|Merchanting and other trade-related...Merchanting and other trade-related services||0.12%|
|Other trade-related servicesOther trade-related services||0.12%|
|Construction in the compiling...Construction in the compiling economy||2.18%|
|Construction abroadConstruction abroad||0.06%|
|Other personal, cultural, and...Other personal, cultural, and recreational services||1.77%|
|Audiovisual and related servicesAudiovisual and related services||0.18%|
|Telecommunications servicesTelecommunications services||1.53%|
|Postal and courier servicesPostal and courier services||0.06%|
|0.8 bn USD of services imported in 2019|
|Air transportAir transport||6.73%|
|Sea transportSea transport||3.89%|
|Miscellaneous business,...Miscellaneous business, professional, and technical services||20.78%|
|Legal, accounting, management...Legal, accounting, management consulting, and public relations||10.46%|
|Business and management...Business and management consulting and public relations services||9.27%|
|Legal servicesLegal services||0.90%|
|Accounting, auditing,...Accounting, auditing, bookkeeping, and tax consulting services||0.30%|
|Architectural, engineering,...Architectural, engineering, and other technical services||4.19%|
|Advertising, market research,...Advertising, market research, and public opinion polling||4.04%|
|Research and developmentResearch and development||2.24%|
|Other business servicesOther business services||0.60%|
|Operational leasing servicesOperational leasing services||1.20%|
|Merchanting and other trade-related...Merchanting and other trade-related services||0.30%|
|Other trade-related servicesOther trade-related services||0.30%|
|Personal travelPersonal travel||7.77%|
|Health-related expenditureHealth-related expenditure||1.79%|
|Education-related expenditureEducation-related expenditure||1.05%|
|Information servicesInformation services||0.15%|
|Audiovisual and related servicesAudiovisual and related services||4.04%|
|Embassies and consulatesEmbassies and consulates||1.64%|
|Military units and agenciesMilitary units and agencies||0.15%|
|Other personal, cultural, and...Other personal, cultural, and recreational services||1.94%|
|Health servicesHealth services||0.60%|
|Construction in the compiling...Construction in the compiling economy||5.68%|
|Telecommunications servicesTelecommunications services||2.24%|
|Postal and courier servicesPostal and courier services||0.30%|
Source: United Nations Statistics Division, Latest Available Data
- Democratic Party of Socialists (DPS): centre-left, led by Milo Djukanovic, pro-Serbia
- Democratic Front (DF): right-wing, populist. It is the main social-conservative opposition political alliance; part of the For the Future of Montenegro coalition
- New Serb Democracy (NSD): right-wing, conservative
- Movement for Changes (PzP): centre-right, populist
- Democratic People's Party (DNP): populism, Serbian–Montenegrin unionism
- Socialist People's Party (SNP): conservative
- United Reform Action (URA): social-liberalism, pro-European
- Democratic Montenegro (DCG): big tent, pro-European
- Social Democratic Party (SDP): centre-left
- Social Democrats of Montenegro (SD CG): social-liberalism, pro-European
- Bosniak Party (BS): centre-right; supports the Bosnian community's interests
- New Democratic Force (FORCA): conservatism; Albanian minority interests
- Croatian Civic Initiative (HGI): centre-right; supports the Croatian community's interests
- Liberal Party (LP): centre, liberal
- Demos: centre-right
- United Reform Action (URA): centre/centre-left; social liberalism, environmentalism.
The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
To find out about the latest public health situation in the country and the current sanitary measures in vigour, please consult the website of the government of Montenegro, including the up-to-date information on the containment measures put in place and public health recommendations. Further info and updates can be found on the website of the national Institute of Public Health and on the official portal Coronainfocg.me.
Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The UK Foreign travel advice also provides comprehensive travelling abroad advice for all countries, including the latest information on health, safety, security, entry requirements and travel warnings.
To know about the economic measures taken by the Montenegrin government to address the impact of the COVID-19 pandemic on the national economy, please visit the dedicated pages on the official portal Coronainfocg.me (in Bosnian). The government announced a second package of measures and a phased reopening of the economy. Further info is available on the portal of the Central Bank of Montenegro and on the website of KPMG.
For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) taken by the Montenegrin government to limit the socio-economic impact of the COVID-19 pandemic, please consult the section dedicated to Montenegro in the IMF’s Policy Tracker platform.
For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.
Any Comment About This Content? Report It to Us.
© eexpand, All Rights Reserved.
Latest Update: September 2023