Montenegro’s total state debt at the end of September amounted to €4.7 billion, or 57.91% of GDP, according to data published by the Ministry of Finance. After accounting for state deposits, Montenegro’s net state debt stood at €4.1 billion, or 50.73% of GDP.
The Ministry’s quarterly report on state and public debt for Q3 shows that government deposits totaled €583.55 million, including 38,447 ounces of gold valued at €125.55 million on the last day of September, equivalent to 7.18% of GDP.
Montenegro’s total public debt reached €4.76 billion (58.59% of GDP). When deposits—including 38,477 ounces of gold—are included, net public debt stood at €4.17 billion, or 51.41% of GDP.
External and internal debt
External debt amounted to €4.4 billion, or 54.37% of GDP, representing a decrease of €41.36 million compared with the end of Q2.
The Ministry explained that the decline in external debt resulted from the fact that no new loan arrangements were concluded during the quarter. Meanwhile, the government drew €18.75 million from previously approved loans for various infrastructure and development projects, while external debt repayments totaled €60.08 million, leading to an overall reduction.
Eurobonds issued in previous years continue to make up the largest share of external debt.
Internal debt amounted to €287.63 million, or 3.54% of GDP, a decrease of €13.14 million compared with the end of June. The decline was driven by scheduled repayments and the absence of new domestic borrowing. Loans from commercial banks represent the largest component of internal debt.
Total borrowings in Q3 amounted to €18.75 million, entirely consisting of drawdowns from earlier loan agreements for infrastructure and development projects.
During the quarter, two new loan agreements were signed, though no funds have yet been withdrawn:
- A €200 million loan from the European Bank for Reconstruction and Development (EBRD) for construction of the second section of the Andrijevica–Mateševo highway.
- An €8 million loan from the World Bank for the modernization of Montenegro’s financial infrastructure and its alignment with SEPA standards (TIPS Clone Project).
Local governments reported a combined debt of €55.01 million, or 0.68% of GDP.
Debt structure
External debt continues to dominate Montenegro’s total state debt, accounting for 93.9%, while internal debt represents 6.1%—a ratio unchanged from the previous quarter.
As of September 30, 99.7% of the country’s debt was denominated in euros. Only 0.30% is held in other currencies (0.24% in USD and 0.06% in SDRs). This favorable currency structure stems from executed currency swap arrangements for the loan from China’s Exim Bank for the Bar–Boljare highway, as well as for the USD-denominated bond issued in 2024.
Fixed-rate borrowing makes up 85.8% of the total debt portfolio, contributing to its stability. Variable-rate loans—mostly tied to EURIBOR—account for 14.2%.
Debt servicing
During Q3, Montenegro repaid €68.10 million in principal to domestic and foreign creditors. Of that amount, €8.02 million was paid to domestic creditors, and €60.08 million to foreign creditors.
Interest payments totaled €30.91 million, including €1.45 million to domestic creditors (primarily commercial banks) and €29.46 million to foreign lenders, mainly for project and commercial loans.
State-guaranteed debt amounted to €121.18 million, or 1.50% of GDP. Of this, €13.36 million (0.16% of GDP) relates to guarantees issued to domestic creditors, while €107.83 million (1.33% of GDP) relates to guarantees issued to foreign creditors.
