Montenegro, Recent Economic Developments, Gross Domestic Products, Business Environment
In spite of the negative effects of the coronavirus pandemic and contraction of the gross domestic product of 15.3 percent in 2020, the Montenegrin economy is recording a strong recovery in 2021, primarily due to successful tourism season, advancements in immunisation, and an open door policy, as well as because of the effects of improved tax discipline and use of electronic fiscalisation.
According to the preliminary MONSTAT data, a downturn of economic activity of 6.5 percent was recorded in Q1 2021, as a consequence of prolonged duration and adverse effects of the health crisis, as well as due to higher base for the same quarter of 2020, during which there was no COVID-19 pandemic. Following the weaker economic performance in Q1 2021, the second quarter recorded high double-digit growth rate of 19.0 percent, and fast rebound of economic flows in tourism and associated economic activities. According to the MONSTAT data, the real growth of the Montenegrin economy in Q3 2021 was a strong 25.8 percent, thus the overall economic growth for nine months of 2021 was 14.0 percent, which was in line with forecasts of the Ministry of Finance and Social Welfare. The highest contributions to the GDP growth rate for nine months come from exportation of goods and services (24.0 percentage points) and individual household consumption (3.1 percentage points).
Currently available short-term indicators point to further strong economic activity rebound in 2021. If observed by sectors, during eleven months of 2021, 707,152 tourists visited Montenegro in collective accommodation and generated 2,894,646 overnight stays. Arrivals and overnight stays increased by 170.9 percent and 213.5 percent respectively, relative to the same period of 2020. The preliminary data of the Central Bank of Montenegro for nine months of 2021 indicate that revenues from tourism amounted to 700 million euro, which is also in line with the estimates of the Ministry of Finance and Social Welfare. Carriage of passengers for nine months of 2021 recorded an annual growth in road transport of 23.0 percent, while carriage of passengers in airports was higher by 145.5 percent. Retail trade in goods for 11 months of 2021 recorded an increase by 16.8 percent, relative to the comparative period of 2020, in constant prices. Furthermore, the industrial production recorded a year-on-year growth of 4.4 percent for 11 months of 2021, whereby increased electricity generation (9.5 percent) and manufacturing industries of 7.1 percent were drivers of its growth.
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