The European Bank for Reconstruction and Development (EBRD) has maintained its growth forecasts for Montenegro, projecting 2.6% growth in 2025 and 2.7% in 2026. Economic growth slowed to 2.5% in the first quarter of 2025, mainly due to reduced net exports following increased electricity imports caused by the Pljevlja Thermal Power Plant reconstruction.
Private consumption and investment rose, supported by higher wages and pensions, as well as infrastructure projects including the Bar–Boljare highway. Strong domestic demand and higher electricity imports widened both the trade and current account deficits, further affected by lower tourism revenues and transfers this year.
Inflation increased from 1% in September 2024 to 4.5% by July 2025, reflecting expansionary fiscal policy and rising real disposable income. Higher labor costs could negatively impact tourism, while ongoing reconstruction at Pljevlja TPP will require additional electricity imports. Wage growth is expected to continue supporting private consumption, and the Growth Plan should bolster investment activity.
