According to the latest forecasts of the European Commission (EC), the Montenegrin economy will grow 3% this year, which is slightly more than the previous estimate.
That is 0.1 percentage point more than the autumn forecasts, when this year’s growth of 2.9% was estimated. In the latest spring report entitled European Economic Forecasts, the EC estimated that the Montenegrin economy should grow by 2.9% in the coming year.
This is slightly less than the autumn forecast, when growth for the next year was predicted to be 3.2%. For last year, the growth forecast was lowered from seven percent to 6.1%.The EC estimates that the slowdown in growth will continue on the wings of high inflation, stricter financing conditions, and still high political uncertainty. Therefore, economic growth will be moderate this year.
Nevertheless, the growth of the economy could regain some momentum in the next year, because capital investments will probably increase on the basis of a more stable political environment and stabilization of financing costs – they believe in the EC.
Trade and current account deficits are expected to decrease this year, due to the expected slowdown in private consumption growth. External deficits are expected to increase somewhat again next year, after larger investments.
The EC assessed that the banking sector is well capitalized and has sufficient liquidity.
However, a reduced demand for loans is expected this year. The expected acceleration of investments in the next year could support credit activity, especially for the corporate sector – the EC believes.
Inflation started to slow down this year, and that trend is expected to continue in the period 2023-2024, with the stabilization of food and oil prices.