Montenegro’s first-quarter national accounts reveal a more fragile growth structure than the government’s headline projections suggest. Real GDP expanded 2.6 per cent year on year, accelerating from 1.5 per cent in the final quarter of 2025 but remaining below the 2.8 per cent achieved a year earlier.
Household consumption increased 6.8 per cent, while gross fixed-capital formation rose 20.9 per cent. Public consumption grew by a more restrained 1.2 per cent. The combination indicates that wage income, credit and construction are supporting activity as the state begins a new infrastructure cycle.
The external position moved in the opposite direction. Exports of goods and services fell 14 per cent year on year, following a 12.8 per cent decline in the previous quarter. Imports decreased by only 1.3 per cent, leaving net exports to subtract an estimated 3.8 percentage points from GDP growth.
This divergence is now the central macroeconomic trend. Montenegro is generating investment and consumption growth but is not producing enough tradable goods and services to offset the import content of construction, equipment purchases, consumer demand and energy requirements.
It also explains the widening difference between official and private forecasts. The government expects 3.1 per cent growth in 2026, while the European Commission projects 2.8 per cent and Erste Group has reduced its estimate to 2.6 per cent, from 3.3 per cent previously.
Erste expects nominal wage growth to slow from 15.5 per cent in 2025 to about 3 per cent this year. Higher fuel and import prices are likely to absorb more household income during the second half, weakening the consumption impulse created by the Europe Now 2 wage reforms.
The transition towards investment-led growth is visible, but much of the increase currently reflects construction rather than completed productive capacity. The economic return will emerge only when transport, energy and tourism assets begin generating additional exports, fiscal revenue or lower import costs.
